Erdene holds a majority interest in Advanced Primary Minerals Corp. (APM) a publicly listed company (ADP-TSXV) which controls a 27 million ton Measured and Indicated high brightness primary kaolin resource in Georgia. In 2008, Erdene announced that it had entered into a binding letter agreement with Beta Minerals Inc. ("Beta") (BMI-TSXV) and Deepstep Kaolin Company LLC
("Deepstep") whereby Erdene agreed to exchange all of its outstanding common shares of Erdene’s wholly owned subsidiary, Erdene Materials Corporation (“EMC”), for common shares of Beta, giving Erdene controlling interest in Beta. The transaction closed on February 27, 2009 and Beta changed its name to Advanced Primary Minerals Corp. The objective of this transaction is to create a focused public vehicle to develop specialty products from these unique primary kaolins ultimately resulting in a boutique industrial minerals business with several high quality product lines.
Prior to the closing of the Beta transaction EMC secured production commitments sufficient to justify construction of a production facility for processing of specialty kaolin products that are targeted to niche markets that demand the unique characteristics of EMC's primary kaolin resource that cannot be met by existing North American sources. In addition, EMC has entered into a three year toll processing agreement with Active Minerals Inc. of Hunt, Maryland to process a guaranteed minimum annual tonnage of a specialized industrial mineral product over the three year term. Construction of the processing facility, located in Dearing, Georgia, started in late 2008 and is expected to be in commercial production by mid 2009.
EMC conducted an extensive core drilling and laboratory testing project between 1998 and 2001 to discover and define new in-ground primary kaolin resources. The project has evaluated and explored the large area of the Southern Appalachian Piedmont Province from east-central Georgia to west-central South Carolina that is underlain primarily by the Sparta Granite. A significant primary kaolin resource was discovered and acquired through a series of leases and land purchases.
For the project’s initial development stage, EMC partnered with industry leader Huber Engineered Materials (Huber), a subsidiary of J.M. Huber Corporation, one of the world’s largest kaolin producers. Commercial production by Huber from APM's primary kaolin deposits began in 2005 under the product name HuberPrimeTM, a high quality light-weight coater product. In 2008 Huber was sold and renamed KaMin LLC. KaMin has the right to mine up to 1.7M tons of wet in-ground kaolin from the Lucky deposit area, one of four main deposit areas controlled by EMC for pre-paid tonnage consideration. The KaMin pre-paid royalties were primarily used to secure additional real estate holdings hosting high quality kaolin deposits.
The kaolin business of central Georgia is a billion dollar per year enterprise and, as such, the cornerstone of the local economy. Mined over the past century, Georgia has seen its high quality kaolins depleted and has seen much of the hi-performance specialty and high priced part of the business secured by international competitors and in its effort to stay profitable, have become high volume bulk commodity producers. APM looks to take advantage of that situation with its unique, high quality primary clay deposits to focus on small to moderate volume opportunities and high margin specialty products.
As part of the Beta transaction, Erdene and EMC commissioned Mac Fraser, a Qualified Person under the terms of National Instrument 43-101, to author a Technical Report on the Companies’ Primary Kaolin properties in Georgia. This report provides a detail account of the company’s kaolin resources. The entire report was filed on SEDAR and can be downloaded by going to the SEDAR site by clicking here. A copy of the table of contents and executive summary can be viewed by clicking here.
