Arianne Resources filed on SEDAR a new mineral resource estimate for the Paul zone of its Lac a Paul project. It shows that the area contains measured and indicated resources of 590.24 million metric tons grading 7.13-percent P2O5.
Arianne Phosphate (TSXV:DAN,OTCBB:DRRSF), formerly Arianne Resources, took a step toward bringing its Quebec, Canada-based Lac a Paul phosphate project into production today with the filing of a NI 43-101 technical report on SEDAR. The updated mineral resource estimate, which incorporates drill results from 153 holes drilled from October 2008 to December 2012, was released in March and indicates that the project’s Paul zone contains 590.24 million metric tons (MT) of measured and indicated resources grading 7.13-percent P2O5, triple the amount it was previously thought to hold.
The company’s press release notes that in order to “show the robustness” of the resource, a 4-percent P2O5 cut-off grade was used as opposed to the 2.43-percent cut-off grade used in 2011. A feasibility study is currently being undertaken and will determine an exact cut-off grade.
The Lac a Paul project has a number of factors working in its favor, including existing infrastructure, existing hydropower and a high-quality labor pool, according to a company presentation. Additionally, the project is expected to positively impact the economy of Saguenay—Lac-St-Jean by creating more than 400 permanent jobs and over 400 indirect jobs, many of which are expected to go to regional companies.
Phosphate, the product Arianne is mining, also has a potentially favorable long-term outlook. As a recent Globe and Mail article notes, there are no substitutes for phosphate, and “[w]ithout plentiful supplies, the wheels will come off modern agriculture.” Further, the bulk of the world’s phosphate is located either in Morocco (nearly 75 percent) or in less mining-friendly locales like North Africa and the Middle East. That makes Arianne, one of only two phosphate companies operating in Canada, stand out.
If all goes as planned, Arianne will begin construction at the project next year and start production in 2016.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.