Argex Titanium Announces Reduced Opex and Increased Future Production Capacity
Latest improvements confirm that Argex technology will benefit from one of the lowest costs in the industry
Montréal, Québec (FSCwire) - Argex Titanium Inc. (TSX: RGX) (“Argex”) announces that it reached a higher level of optimization of its titanium dioxide pigment production process allowing to further reduce its operational costs and positioning the company very favorably in comparison with other TiO2 pigment producers worldwide. The production capacity has also been revised upwards, driven by major improvements in the process which created greater efficiency, reduced capital expenses and allowed for greater flexibility. This resulted in the ability to process greater volumes with little changes in equipment sizing. The capacity of the Technology Center will be increased to 3,000 metric tonnes/year, and that of the commercial plant to 100,000 metric tonnes/year.
These announcements follow the hiring, last February, of external experts in process engineering and design as well as of the company Process Engineering International (PEI), specialized in process engineering. The firm undertook the final assessment and optimization of Argex’s flowsheet, including heat and mass balance. Improvements further simplified the process, reduced water and chemical inputs and perfected the morphology of the product.
Argex’s operating costs will be within the first quartile, based on the analysis of multiple industry cost curves.
Increased capacity for the Technology Center and the Commercial Plant
A detailed analysis of the equipment specifications and costs, following the call for tenders of the last few months, led to the review of the production strategy. The increased capacity of the Technology Center to 3,000 metric tonnes will provide for the production of commercial pigment samples on a larger scale in order to respond to the various product specifications required by clients and off takers. The construction of the Technology Center will begin once the financing is confirmed and Management expects that the Technology Center could be in operation in 2019.
This analysis also led to the decision of increasing the planned capacity of the commercial plant to 100,000 metric tonnes per year. As well, Argex Management decided to move from constructing the plant in two to three stages to one stage only, with a scale up factor of approximately 30 times between the Technology Center and the Commercial Plant, a very reasonable scale up factor by industry standards. Consequently, the 100,000 metric tonnes capacity should be reached shortly after the end of the construction of the plant, conservatively estimated to be by the end of 2022.
«The latest validations allowed us to bring our production strategy to a superior level and to have a solid bankable project, declared Mazen Alnaimi, Chairman and Chief Executive Officer of Argex. The reduction of our operation costs and the increased capacity for our Technology Center will eliminate the need to finance negative cashflows since the Center will generate revenue early on, ahead of the construction of our future commercial plant. Our construction schedule will be slightly delayed due to these additional works but improvements will generate very solid economics thus creating value to our shareholders as well as a very positive longer term impact. »
Mr Alnaimi added: “We are confident that our discussions with buyers, vendors and licensees will be greatly accelerated given our success in achieving such a low cost of operation.”
Argex can now turn its plans into reality
All the work done during the last few months brought Argex to a new phase in its strategy. With a solid and optimized technology on hand, validated by independent experts, the confirmation of its very low level of cost production and the growing interest from clients and offtakers, the company can now make further steps to turn its plans into reality. Therefore, Argex signed a letter of intent for the location of its future infrastructures. An official announcement should be made within the next 90 days.
About Argex Titanium
Argex Titanium Inc. has developed an advanced chemical process for the volume production of high-grade titanium dioxide (TiO2) for use in high-quality paint, plastics, cosmetics and other TiO2 applications. The Corporation’s unique proprietary process uses relatively inexpensive and plentiful source material from a variety of potential vendors to produce TiO2, along with other valuable by-products. Argex’s process provides a significant cost and environmental advantage over current legacy TiO2 production methods.
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This news release contains statements that may constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking information and statements may include, among others, statements regarding future plans, costs, objectives or performance of Argex, or the assumptions underlying any of the foregoing. In this news release, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” “target” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, including additional closings of the private placement referred to above, or if any of them do so, what benefits Argex will derive. Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond Argex's control. These risks, uncertainties and assumptions include, but are not limited to, those described under “Risk Factors” in Argex’s Annual Information Form for the fiscal year ended December 31, 2016, which is available on SEDAR at www.sedar.com; they could cause actual events or results to differ materially from those projected in any forward-looking statements. Argex does not intend, nor does Argex undertake any obligation, to update or revise any forward-looking information or statements contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.
Chairman and Chief Executive Officer | Argex Titanium Inc.
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Source: Argex Titanium Inc. (TSX:RGX, OTC Pink:ARGEF, FWB:ASV)
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