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August 21, 2011

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Mark Anthony

Even if my physics thesis is incorrect, which I doubt. Because everything I read about froth flotation says "do NOT over-grind or you get low recovery rate". Even if I was wrong, they can continue to produce PGM from the leach residue, and they do not lose any extraction rate:

They will produce the SAME AMOUNT of nickel, from 30% less ores. They will maintain flat nickel production so as not to destroy the price.

Thus you get 30% less ores process, you will produce 30% less palladium.

But the physics can not be wrong. There is simply NO WAY to extract PGM from Froth Flotation from the leach residue. There is no other efficient and economic way of first stage PGM extraction.

Remember we are talking about leach residue that contains all the original ore material, minus the base metals. We are talking about a few grams of PGM from each ton of leach residue material. That few gram is scattered metal dust that can not be extracted anyway you think about it.

Mark Anthony

No problem. I spent quite a bit of time poundering on this because such a development would be just stunning. The more I looked at it the more I am convinced. But I encourage you to do your own DD and scrutinize my conclusion.

There are numerous report from Norilsk that they are on the course to implement Activox to their entire Polar Region production. They are running a demo plant at Tati Nickel in Botzwana, Africa and shipped tens of thousands of tons of Norilsk ores to there for processing experiments.

The investor report that indicate that they are drastically cutting sulphur pollution starting in early 2013 and done by early to mid 2014, indicates that's when the Activox is fully implemented.

I hope major PGM industry users take note now and start to stockpile now. So the panic may set on long before Norilsk turn their new process on.

MontyHigh

Thank you for taking the time to respond. I left my spreadsheet at home, so I'll check the numbers tonight. I really hope you are right that they are adopting Activox and are going to lose most of their PGM production because if you are right that's going to be a very profitable trade.

Let me check my numbers and if its really just 18% of sales I'll probably issue some kind of retraction.

Any thoughts about when Norilsk will actually announce that they are shifting a large part of their process over the Activox? Isn't it also possible that they just cleaning up the old process. Norilsk doesn't seem to be real strong on discussing what their plans are.

Thanks again,

MontyHigh

Mark Anthony

Dear Sir:

I am the author Mark Anthony who posted about Activox Process. Yes do your own DD but you are not doing the math properly yourself.

Norilsk will lose PGM revenue, but gains on improved Nickel and Copper extraction from the ores (extract 100% versus 70%).

The following are Norilsk metal production in 2011, and metal prices as of last Friday:

Ni: 235518 ton ($21.25/kg) = $5.005B (43.52%)
Cu: 365698 ton ($08.78/kg) = $3.211B (27.92%)
Pd: 2.72M oz ($750/oz) = $2.042B (17.75%)
Pt: 0.663M oz ($1875/oz) = $1.243B (10.81%)

Ni and Cu combined is 71.44% of total revenue. Pd and Pt combined is 28.56%

By adopting Activox, Ni and Cu extraction is increased from 70% to 100%, while Pd + Pt drops to 0%.
So Nii and Cu revenue will be 71.44% * (100%/70%) = 102.06%

They are still ahead with boosted Ni and Cu revenue thanks to higher Ni and Cu extraction rate, even though they lose Pd and Pt revenue.

Penbat

Well he does address this:

"c. Activox Process consumes much less energy. The chemicals can be recycled and reused. Not to mention that it extracts nearly 100% of the base metals, versus 70% in pyrometallurgy. The lower cost, more efficient extraction of nickel and copper more than offset loss of PGM revenue."

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