Mineworx Corporate Update
Dear Shareholders
2022 promises to be a significant year as we reach key milestones and formulate our new corporate identity. Positioning ourselves strongly in the Clean Tech space will be extremely beneficial for the Company in the future and will allow us better access to institutional investors. This will not only increase our shareholder base but will broaden our story to a more diverse viewership.
Cehegin Iron Ore NEWCO
We have mentioned our intention to spin off our Spanish Cehegin iron ore concession into a newly formed public company. We are well on our way to finalizing the structure and the relevant documents for our upcoming shareholder Special Meeting, including the preparation of the necessary regulatory submissions. An information circular is near completion and will be sent to our shareholders describing the intended transaction in greater detail.
The transaction is to be based on a return of capital distribution. This will allow shares in Newco to be issued to shareholders on a pro rata basis to the ownership of existing Mineworx shares held and on a tax-free basis. We will need shareholder approval for this transaction and will be voted on at the Special Meeting in March.
The drill program in Spain is moving very slowly due to terrain conditions and the lack of availability of additional drill equipment and experienced drill operators in Spain at this time. There is pent up demand worldwide for these services resulting in lengthy delays in many projects. We are in our 3rd and final stage of drilling and are close to completion but are still waiting for the core analysis from ALS labs on our 2nd phase drilling which is about 6 weeks overdue. Globally the mining industry is experiencing these kind of lab delays and it would appear that labs are taking care of their larger customers first at the expense of the smaller players.
Last week representatives from the mining consultant firm Micon International were onsite conducting their due diligence requirements on drilling and methodology, including core handling and inventory procedures so they can write an updated technical report which is a regulatory requirement for the transaction we are proposing to undertake.
The approval process for the small scale 100,000 t/year production facility is going well. All relevant people and departments have verbally agreed with the project, including the environmental department. The last submission is an engineering report being completed on dewatering the large reservoir adjacent to where the facility will be built including a structural integrity report on the existing open pit itself. The bottom of the pit has a substantial amount of high-grade ore that can be immediately processed. We anticipate written approvals to follow with the submission of this report to the appropriate departments.
Mineworx Rebranding- a Clean Tech Company
The rationale behind the spin out of our iron ore asset is not only to enhance shareholder value, but also the start of a rebranding program for Mineworx which will include a name change. Moving forward we wish to identify ourselves as a Clean Tech company developing environmentally friendly processing technologies to recover precious metals from sectors other than traditional mining. As we begin to increase our institutional investor base in our company, we will be able to attract green funds and interest groups focused on Clean Tech innovations with the potential to make positive contributions to health and the environment by playing a proactive role in substantially reducing the carbon footprint on our planet.
Pilot Plant Starting Up
The pilot plant in Tennessee is about to begin operations. We have had unfortunate delays primarily due to changing the location from our JV partner’s location to a different building close to their main operation. This triggered permitting issues for both the equipment in our pilot plant as well as various city building permit requirements for a stand-alone facility. This has created near-term delays but was the best choice to position the company for the long-term. We are focused on building a sustainable legacy business model that will allow for future growth and expansion.
Initially the permitting process could not start until the replacement components for the faulty items were received and in place for the finalized engineering drawings to be included in the application. Additional time was required by the engineering firm as some of the labeling of the electrical components was incorrect and needed detailed analysis to ensure the correct information was included in the documentation.
The process to apply for the city building permits has also been further complicated by Covid-19 absenteeism in Johnson City to key individuals in the civic planning department. Our application has just been approved and the Company can now finish the installation and connect the pilot plant to city utilities. The only outstanding item is the city electrical and plumbing inspectors have to do an on-site review to complete the building inspection before the pilot plant is allowed to commence operations. This has been scheduled and we anticipate finalization before the end of the month.
Installing the pilot plant in a larger space will allow us to build a large scale, fully operational lab. This will allow for more extensive operational testing as well as for future development opportunities when the commercial plant is operational. In the future the pilot plant will be used to determine optimal chemistry composition for various types of new feedstocks as they become available. We will also have the necessary space to continue testing and optimize new product development programs that we have been working on in our Vancouver lab for quite some time.
We have continued to work very closely with our joint venture partner, Davis Recycling Inc, to ensure a successful start-up of the commercial project. Davis has put in place the required infrastructure to allow for a smooth transition to an operating facility. This has included the addition of more processing equipment that will convert the raw catalytic converters into the powdered feedstock required by the Mineworx system. The new equipment allows Davis to process feedstock exceeding the commercial plant’s anticipated capacity.
The marketplace is excited about the opportunity that our joint venture, PGM Renewal LLC, is offering. Both Davis and Mineworx have already been fielding inquires from potential suppliers who are trying to find a home for their product. Davis will have no issue securing feedstock to meet full commercial run requirements.
Ben Davis, President of Davis Recycling Inc. stated “I have been frustrated by the bureaucratic delays created by the city but have been extremely impressed by the team Mineworx has assembled and the work they have been accomplishing in the time they have been onsite in Tennessee. PGM Renewal is going to provide a world class solution in the catalytic converter recycling space.”
Updates on pilot plant operations will be forthcoming as we begin and accelerate the optimization protocols. We have selected a Tennessee based engineering consulting firm to assist in the engineering and design of the commercial facility and work has already commenced. Our timeline continues to be 3rd quarter for commencement of operations of the commercial plant with relevant information communicated to our shareholders as we continue our path towards full commercialization.
As always, the management of Mineworx enters 2022 with the primary purpose of maximizing shareholder value. To accomplish this goal the company is focused on two strategic objectives, creating value from the Cehegin Iron Ore asset, and moving the catalytic converter business into a production stage. Both these objectives have solid plans and resources that will provide current benefits and allow for long-term growth. Mineworx management and employees continue to be excited by the task in front of us and believe we are at the start of something that has the potential to be truly great.
We remain humbled by the continued trust and support that our shareholders continue to provide to Mineworx and thank-you as we strive to live up to expectations in 2022.
Greg Pendura
President & CEO
Mineworx Technologies Ltd.
Contact:
MINEWORX TECHNOLOGIES LTD.
Greg Pendura
President & CEO
780 800-0726
