09/10/2007 - 22:00

BioHeap developer eyes listing

09/10/2007 - 22:00

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A Perth company that has developed a revolutionary new method of extracting copper, nickel and other base metals from ore is pursuing a stock market listing through a reverse takeover of newly listed explorer Trajan Minerals Ltd.

A Perth company that has developed a revolutionary new method of extracting copper, nickel and other base metals from ore is pursuing a stock market listing through a reverse takeover of newly listed explorer Trajan Minerals Ltd.

Northbridge-based Pacific Ore plc, which owns the BioHeap technology, pursued a range of funding options before opting for an Australian Securities Exchange listing.

More than $20 million has been invested in development of its BioHeap technology, which is currently being tested at a pilot plant in China.

Managing director Gary Frere said Pacific Ore would have more than $8 million in cash once the listing was completed, which would allow the company to complete its development activities.

The BioHeap technology involves a bacterial heap leach process for extracting base metals from sulphide ores.

Mr Frere said the technology accelerated a natural process, and meant that heap leaching, which is widely used in the mining industry, could be used on a wider range of ore bodies.

Pacific Ore has partnered with Shanghai-listed Western Mining Joint Stock Company to build a 4,500-tonne pilot plant at a copper mine in northern China.

Subject to the results of the pilot plant, the two companies may proceed with a commercial development next year.

The company has started, or is about to start, testing programs with several other nickel and copper producers around the world.

Pacific Ore has also signed a BioHeap licensing agreement with Australasian Resources Ltd, which is planning a 5,000t heap leach trial at its Sherlock Bay nickel project in the Pilbara.

Australasian has engaged engineering firms Aker Kvaerner and URS Australia to work on the project, and aims to commence site works later this year after gaining regulatory approvals.

Efforts to commercialise BioHeap go back to 1999, when Perth-based Titan Resources Ltd acquired the rights to the technology.

Titan, which has since been bought by Consolidated Minerals Ltd, spent about $US15 million developing and testing the technology, which it planned to apply at its Radio Hill nickel mine in the Pilbara.

Its strategy changed in 2004 when it set up a new company to commercialise the technology.

Since then, investment group RAB Capital, Finnish mining group Outokumpu, and private US metals trader Gerard Metals Inc have invested about $US3.7 million in the technology, through Pacific Ore plc.

Mr Frere said the company had intended to list on the London Stock Exchange’s Alternative Investment Market but did not get the expected support from brokers.

Its planned backdoor listing involves Trajan issuing 49.6 million ordinary shares, 28.4 million performance shares and two series of options to buy the business.

This would result in the current owners of Pacific Ore becoming the majority shareholders in the listed company.

Pacific Ore will nominate three new directors to cement its control of Trajan.

The share and option issues value the deal at $31.7 million, based on a share price of 40 cents.

The performance shares will convert into ordinary shares if Pacific Ore or its joint venture partners commit to developing a 10,000t per annum BioHeap project, and secure funding, by the end of 2010.

The deal is conditional on Trajan raising at least $4 million at 40 cents per share, through Oceanic Equities.

It may raise a further $2 million in over-subscriptions, which would give Trajan $8 million in cash.

Mr Frere believes BioHeap offers a range of commercial and environmental benefits over traditional extraction methods, which involve concentrating and smelting the ore.

He said the BioHeap technology could be used to reprocess low-grade ore on waste stockpiles. 

Miners could build a stand-alone heap leach plant or they could run a heap leach plant alongside their existing operations, which would allow the miners to reduce the cut-off grade for ore.

 

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