Forestmusic1,

Like many I'm still trying to get my head around Chromite, its various grades and its prices. I'm look forward to the release of the SPQ study and Genuity’s next report so that we can get a better understanding of these types of deposits. In the meantime here is what I know.

Chromite ore is ore that contains Chromic oxide (a chromium mineral that contains iron and magnesium). The grade of chromite ore seems to need to be around 30 to 35% or better to be mined. The lower the iron and magnesium concentration the better). Outside of its very small use as foundry sands (used to produce heat resistant bricks and casts) Chromite ore is processed to upgrade its chemical properties, usefulness and value. Chromite ore, as an industrial input, seems to be priced about $160-220/tonne. The variance in price is based of the percentage of chromite in the ore, the concentration of Chromium in the Chromite grains, the degree to which Mg and Fe are present (the less the better) and the crystalline nature of the ore.

The percentage of CHROMITE in the ore can be concentrated through mechanical processes such as gravity and magnetic separators to increase the concentration of Chromite. I assume it’s a mater of economics as to what is a minimum grade to start with, shipping costs, processing costs etc. [I suspect that this is what SPQ was referring to when it was looking at the feasibility of improving its grades].

Most (90%) chromite is used in production of steel as FERRO CHROMIUM. Ferro Chromium is produced from chromite ore by smelting it with carbon in a blast furnace. The amount of carbon in the output can be controlled to produce High Carbon (HC) Ferro Chromium (>10 Carbon) and Low Carbon (LC) Ferro Chromium. Ideally they want to get as much iron and carbon out of the Ferro chrome as possible as it affects the metallurgy of the steel. Chromium (Cr), not to be confused with Chromite (Cr2O3), concentrations are expected to be 60% or higher. This is the prices you most often see when Googling chromium prices. Current spot for LC Ferro chrome is $1.75US/lb (just under $4000US/tonne) today while HC Ferro chrome is $1.35/lb today ( http://www.metalprices.com/FreeSite/... ).

So it’s easy to see that the higher the grade you start with the better. Higher starting grades, greater widths, and an open pittable mine means lower mining costs per lb of Chromium, and decreases the costs of concentrating, shipping and processing. I suspect that is why SPQ is looking at whether it is feasible to upgrade the concentration of Chromite in chromite ore it found.

Lastly Metallurgical Chromium is 99.5%+ Chromium. It’s produced by 'roasting' Chromite ore with sodium carbonate, dissolved in acid to produce a intermediary concentrate that is further refined to pure Chromium. I haven't found a price for this but logic dictates that its worth at least 1.7 times Ferro chrome since you could have made it into that to start with and with a lot less processing. So say $7000US/tonne of 99.5%+.

Now for us here at NOT we have a shallow deposit that appears to be amicable to open pit mining. If we do nothing but mine it and sale it FOB at a port (Thunder bay by truck or Vancouver by rail) its worth $200/tonne gross. Concentrate it to 60-70% Chromite or the price goes up a little better than proportionally but the cost of transportation per tonne stay the same (more money for us vs a the shipping company). The big leap is whether or not its worth the risk and capital cost to process it to Ferro chrome?

Hope this helps.

... Been There