Stans Energy Corp. (TSX-V: RUU) ("Stans′ or the "Company′) has reached
an exclusive agreement with the majority owners of the Kyrgyz Chemical
Metallurgical Plant (KCMP) (See Feb. 8, 2010 press release for option
agreement details), to purchase 100% of KCMP′s Rare Earth (RE)
processing complex, including a private rail terminal, for a total of
$5,500,000 USD. The exclusive agreement is subject to a legal due
diligence period and TSX Venture Exchange approval.
For almost three decades this facility produced 80% of the former Soviet
Union′s RE products. The RE processing complex and the rail terminal
were used to produce and transport materials, equipment, chemicals and
final product to and from markets when the Kutessay II RE mine was last
in production. The Kutessay II mine is now 100% owned by Stans Energy.
At that time the processing facilities comprised of four individual
plants that were part of a much larger industrial complex.
Historical Production Flow Sheet
Plant 1
Much of the past technology used in Plant 1 would not be used today, as
newer Sorption technology has proved to be more efficient and less
damaging to the environment when removing radioactive materials. Plant 1
has been decommissioned and will not be used in Stans′ new design.
Historically, RE feed from the Kutessay II mine was brought to Plant 1
to be refined into a new, higher grade concentrate. At this stage, the
radioactivity was removed through roasting. Modern technologies have
made this step redundant.
Plant 2
Plant 2 separated the mixed rare earth solution from Plant 1 and
produced light rare earth (LRE) concentrate (La, Ce, Pr, Nd), middle
rare earth (MRE) concentrate (Sm, Eu, Gd), heavy rare earth (HRE)
concentrate (Tb, Dy, Ho, Er, Tm, Yb, Lu) and Yttrium Oxide. The
equipment in Plant 2 is intact, but has been removed from the building
and stored at a location 4 km away for security purposes. Stans intends
to refurbish and reassemble Plant 2.
Plant 3
Plant 3 separated the MRE and HRE concentrates into final oxides, metals
and alloys. This Plant was where the various complexing, elutriation,
and regeneration solutions were prepared. The process was carried out on
a batch system where the conditions in the ion exchange columns (linear
flow, solution, complexing, elutriating solution concentration solution,
etc.) were specific for each REE. The Rare Earths were then precipitated
as the oxalate (carbonate), filtered and washed and then dried and
calcined to rare earth oxide (REO). The RE metal section involved the
production of metals from the REOs through various electrical, induction
and arc furnaces.
The Soviets never used Plant 3 to its full capacity as uses for HREEs
were limited between 1965 and 1990. In the late 80s, the Soviets
initiated plans for the Plant′s expansion to process 3-4 times the
amount at which it was operating. The industrial building expansion was
completed when the Plant stopped operating in 1991, and some new
equipment is on site but not installed.
The Plant continued to process remaining small amounts of HRE
concentrate into final metals up until 2009. The last of its HREE
concentrate and final products were sold in 2010. Plant 3 is in good
working condition.
Plant 4
Plant 4 separated light rare earth concentrate from Plant 2 into
individual rare earth oxides. Like Plant 2, much of the equipment from
Plant 4 was removed and stored at a secure location. A feasibility study
will determine whether Stans Energy sells light rare earth concentrate
derived from Plant 2, or reassembles Plant 4 to produce final oxides.
Rail Terminal
The newly purchased rail terminal connects to the Central Asian Rail
Network, which connects to Russia and all countries in Asia including
China, Korea, and by ferry to Japan. The purchase of the Rail Terminal
includes a gantry crane, two warehouses, two offices, and a weigh
station. The land purchased with the rail terminal amounts to 143,500 m2.
The rail terminal is roughly 15 km from the KMCP Processing Plants by
paved road, and is roughly 35 km away from the Kutessay II mine by paved
road.
Equipment Inventory and Industrial Space
In an independent assessment of the equipment, it was determined that
97% of the equipment purchased that was previously used for processing
rare earths were in either good, or satisfactory operating condition,
and only 3% required repair. Stans is currently compiling and
translating a full list of the inventory included in the purchase to be
posted to its website at a later date. The total industrial space in
Plants 2 and 3 is 21,812 m2.
Capacity Old & New
Previously, the entire plant operated at approximately 500 mt/annum of
final rare earth product. During its time in operation, its capacity
varied depending on which products were needed and at what purities. 120
different final rare earth products were produced, including oxides,
metals and alloys of all lanthanides with purities up to 99.99%. In the
late 80s, the Soviets initiated plans to expand the operating capacity
to 1500 mt, but never finished the expansion. Stans Energy will provide
its estimates to expand the capacity of the processing complex at a
later date. A feasibility study will commence shortly to determine the
optimal scale at which to bring Kutessay II back into production.
Upon the completion of the transaction, Stans Energy will engage the
Russian Institutes that designed and built KCMP to help redesign and
refurbish the Facilities to create a new, efficient rare earth supply
source. New technologies and solvents that were unavailable during the
Soviet era will be tested in an effort to improve the Plant′s efficiency.
Stans Energy is currently in discussions with interested parties related
to financing the purchase of the RE processing complex and other
business initiatives.
Robert Mackay, President and CEO, stated, 'The acquisition of the KCMP
RE Processing Plants and Rail Terminal is the culmination of many months
of hard work and due diligence by Stans Energy and a variety of
consulting parties. Owning a processing facility is the next significant
step in the implementation of our business plan to become a major
developer and producer of HREEs. It is my hope that restarting this
facility will help to reestablish the once vibrant community in the town
of Orlovka, where KCMP is located.?
This release may contain 'forward-looking statements' within the
meaning of Canadian securities legislation and the United States Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are made as of the date of this document. The Company
disclaims any intention or obligation to update or revise any oral or
written forward-looking information and statements whether as a result
of new information, future events or otherwise, except as required by
applicable law. Accordingly, readers should not place undue reliance on
forward looking statements.
The use of any of the words 'anticipate', 'continue', 'estimate',
'expect', 'may', 'will', 'project', 'should', 'believe', and similar
expressions are intended to identify forward-looking statements. These
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. Although the
Company has attempted to identify important factors that could cause
actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
