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Sodium Sulfate

ALKATEC. Mining ProJect Bacadehuachi, Sonora, Mexico. Sodium Sulfate. 1.- Introduction. 4.- Technical Analysis. 5.- Final Conclusions. 2.- Previous Information. 3.- Market. 1.- Introduction.

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Sodium Sulfate

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  1. ALKATEC Mining ProJect Bacadehuachi, Sonora, Mexico Sodium Sulfate 1.- Introduction 4.- Technical Analysis 5.- Final Conclusions 2.- Previous Information 3.- Market

  2. 1.- Introduction. Alkatec, S.A. de C.V. is a Mexican corporation established on March 14th, 1994. Its main objectives are the exploration and exploitation of different non-metallic minerals. Alkatec, forms part of Sand-Corporative, a group of enterprises resulted from 25 years of expierence in the exploitation of different minerals all along Mexican territory. This group was initiated with our first mining company Minera Frio Zac, S.A. de C.V. in 1974.

  3. 2.- Previous Information. Alkatec, S.A. de C.V. began works of exploration and geology in Bacadehuachi Sonora in 1997. It acquired several federal-mining leases, which are:

  4. 3.- Market. 3.1 Product Description and Characteristics. Sodium Sulfate Na2 So4 (Thenardite) is a sodium salt witch has several uses: as color fixer in the textile industry; as raw material for the detergent industry, etc.

  5. 3.- Market. (cont...) 3.2 Previous Information and Market Perspectives. Information: Our load (demand) analysis has been focused basically on these two industries. It was made by Minera Frio Zac, S.A. de C.V another mining corporation which actually supplies other raw materials and is aware of the great need of a new supplier. 3.3 Load (Demand). Our load (demand) analysis has been directly focused on the annual consumption of the following industries; all established in Mexico.

  6. 3.- Market. (cont...) 3.3.1 Detergents: All these industries are our actual consumers and have expressed enormous interest in consuming our sodium sulfate.

  7. 3.- Market. (cont...) 3.3.2 Textiles: Estimated consumption: 130,000 tons/year as a color fixing. 3.3.3 Exportation: Thanks to our unique locations (only 240 kms. From Agua Prieta, Sonora border with the USA) we can export with great competitivity in USA. 3.4 Supply: Nowadays, the only sodium sulfate supplier for the whole Mexican territory is: Quimica del Rey, S.A. de C.V., located the Mexican state of Coahuila it has a presence for last 18 years in market, therefore the interest in finding another supplier, augers well for Alkatec.

  8. 3.- Market. (cont...) 3.5 Competitive Analysis: 3.5.1 Quality: Thanks to the nature of the mineral deposit, we can obtain a high quality product, similar to our competitor’s Quimica del Rey, S.A. de C.V. 3.5.2 Price: Our price is highly attractive because our raw material and production procedure will take place “on site”, therefore it would allow us to take advantage of lower cost of production, so our prices can always be below our competitor’s (Quimica del Rey $137.00 USD. F.O.B. Plant).

  9. 4.- Technical Analysis. 4.1 Introduction. This project is part of an exploration project of evaporating deposits in the State of Sonora, Mexico. At first, explorations nearby Bacadehuachi were done (NW of Hermosillo, Sonora). Our project includes an area of over 5,400 hectares from which only 300 hectares have been explored with drilling. The remaining exploration was performed in surface. The drilling covered length of 1,546 m., 24 drill holes went as deep as 42 to 75 m. and 16 (75.00%) turned out to be positive. All drilling was done on dry bases therefore results of material analysis are real since none dilution by water is present.

  10. 4.- Technical Analysis. (cont...) These sodium sulfate deposits have strata of white light grey and light brown in color, which shows a high degree of purity and low contamination. The thickness of strata varies from 0.3 m. to 10 m. with alternate layers of mud, clay and fine grain sand. This is typical of alluvial basins of evaporating type deposits. The average thickness is 28 m. of sodium sulfate (Thenardite).

  11. 4.- Technical Analysis. (cont...) 4.2 Location. Our project is located 250 km. NW from the city of Hermosillo, Sonora it is within the town limits of Bacadehuachi, in the same State. The mining claims have following coordinates: 29º 46’ 20” - 29º 52’ 00” North Latitude 109º 06’ 10” - 109º 10’ 20” West Longitude

  12. 4.- Technical Analysis. (cont...) How to get there: From the city of Hermosillo, proceed toward Nogales, then take the highway to Ures, Moctezuma, Huasabas and “El Coyote”. From the last point continue south on the road to Bacadehuachi. The town of Bacadehuachi has adequate infrastructure such as good roads, electricity, potable water, telephone, fax and medical services. Another advantage is its proximity to the U.S. border: 280 km. by road from Douglas, Arizona.

  13. 4.- Technical Analysis. (cont...) 4.3 Objectives. The Bacadehuachi area has been explored several times for sodium sulfate, confirming regular size strata as well as salty efflorescence which is closely related to such strata. These last ones have been exploited for livestock. This first evaluation, associated whit morphologic evidence and salty efflorescence help to generated the first preliminary geologic model consisting of a river-basin.

  14. 4.- Technical Analysis. (cont...) • The previous information allowed us to establish the following objectives: • a) Geological definition of the area: • Mineralogical formations • Topographical formations • Geomorphological formations • Stratigraphic formations • All the above allowed us to determine the sodium sulfate deposits.

  15. 4.- Technical Analysis. (cont...) b) In order to establish on short term bases the necessary information, we have proceeded with pneumatic drilling, using the reverse circulation method. c) Determination of usable salt strata. d) Determination of total potential reserves.

  16. 4.- Technical Analysis. (cont...) 4.4 Drilling Results. After evaluating the different geological information obtained, it was decided to invest in a deep hole drilling (72 m.) to quantify the reserves of sodium sulfate. Following where the next steps :

  17. 4.- Technical Analysis. (cont...) 1.- By means of reverse pneumatic drilling, a total of 1546 m. Of holes were drilled. The fine powder recovered from these drilling was used to determine the thickness and quality of thenardite (sodium sulfate layers). A total of 24 drill holes were completed with up to 70 m. depth. The following results were obtained: 1.1.- The average thickness of the sodium sulfate strata is 28.0 m. The salt and the cutoff grade of 78.00% of sodium sulfate was used. Therefore the deposit averages between 78% and 98% of sodium sulfate.

  18. 4.- Technical Analysis. (cont...) 4.5 Project Dimension: Reserves Calculations. Based on our pneumatic reverse drilling method the results obtained from the 24 drills certify that an average 28 m. thick layer of sodium sulfate is located under a 22 to30 m. sand surface layer. The above drill holes covered 300 hectares representing 28,000,000 tons of proven sodium sulfate reserves. These figures were obtained by the following calculations: 400 m. (width) x 2,000 m. (length) x 28 m. (depth) = 22,400,000 m3 x 2.5 p.e. (specific gravity) = 56,000,000 tons.

  19. 4.- Technical Analysis. (cont...) Our geologists took a 50% confidence fact therefore we arrived at 28,000,000 tons. of proven reserves. Beneficiation methods should allow us to recover some additional tons from the additional resources. 4.6 Mining Works. With the results obtained from the pneumatic hole drilling, we decided to make a work of vertical exploration with a section of 2.40 m. X 2.20 m. where nowadays we are at 42m. depth and we found salty strata since 34 m. depth. Nowadays, this work can be used to an initial exploitation of the mineral deposit.

  20. 5.- Conclusions. 5.1 Market: Our product has a high demand in Mexico since presently there is only one producer, who uses a high cost chemical process of production. Additionally sodium sulfate has a good market in the US which we can readily access through Douglas Arizona or by ocean from Guaymas. Weconsider Guaymas Sonora to be the Pacific Ocean city only 400 km. from our deposit and an excellent gateway not only to the US but other world markets. Initial commercial contacts give us the confidence that the Mexican consumers are ready to purchase our product due good quality and competitive pricing.

  21. 5.- Conclusions. (cont...) We could reach 500,000 tons a year production within to years of project go ahead which would generate grow sales of $50,000,000.00 USD. 5.2 Project Life: At a yearly production level of 500,000 tons., the mine life will last for approximately 60 years. Since the total claims of Alkatec cover 5,000 hectares of which only 300 have been explored, the estimate substantial future growth of minable reserves. This can be proven with deep hole pneumatic drill and work on beneficiation methods.

  22. 5.- Conclusions. (cont...) 5.3 Legal Issues: Alkatec is totally owned by Sand Corporation who has over 25 year of mine development and mineral sales experience in Mexico. There are no outstanding legal issues for the Alkatec property and Sand Corporation can provide the necessary support to complete the market study and initiate this project. Sand corporation is looking for a partner with the necessary technological background and capability to move forward a mining project on a level best suited to market conditions.

  23. 5.- Conclusions. (cont...) 5.4 Further Information: Addendum following geological information is available for review i n our Mexico City offices: • Pneumatic hole drulling logs descriptions • Several federal leases • maps and geological sections, etc. • Periférico Sur No. 4225 Desp. 002 Col. Jardines en la Montaña • Tlalpan, México D.F. C.P. 14210 • Tels. (525) 645-5015, 5020, 5026 Fax (525) 645-3993 • E-Mail: sinkteck@df1.telmex.net.mx

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