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Company Overview
Black Bull Resources Inc. is an integrated miner, processor, and marketer of industrial minerals under the trademark ScotiaWhite™ and trades on the TSX Venture Exchange under the symbol "BBS". The Company's mission is to become a leading producer of industrial mineral products in an environmentally-sound and socially-responsible manner.
The Company has defined, through exploration and development, a large resource of high quality quartz, kaolin, and mica at the Company's property in Yarmouth County, Nova Scotia, Canada. (the "White Rock Property"). Research and development work to date has confirmed excellent quality and market potential of the ScotiaWhite™ quartz, kaolin, and mica resources. The Company plans to produce quality products at competitive prices to meet the growing needs of customers. Research to improve the performance of products and develop new product lines is an on-going activity. Exploration of new quartz and kaolin zones will increase the company's large resource base and identify new products.
Attracting companies to build manufacturing plants that would use quartz, kaolin, and mica to produce value-added products in southwest Nova Scotia is an integral part of the Company's strategy to create and strengthen a stable market base. ScotiaWhite™ quartz, kaolin, and mica products are required by a wide range of industries, including producers of pool plaster, engineered stone, bunker sand, exterior insulation & finish systems (EIFS), and landscape stone. These secondary industries often locate in proximity to raw materials and markets. The White Rock Property is located adjacent to one of the largest markets in the world, the eastern seaboard of the United States.
Additional value-added products are being considered for future development with the introduction of additional technology. For example, a grinding plant could produce high-valued silica flour for use in paints and plastics.
White Rock Property Location and Infrastructure
The White Rock Property is situated approximately 45 kilometres (30 miles) northwest of Shelburne, Nova Scotia, Canada. The property consists of 105 contiguous claims (4,190 acres) and is 100% wholly owned by Black Bull Resources Inc. ("Black Bull"), subject to a 2% net smelter royalty.
It is well positioned with excellent infrastructure including a paved highway that passes through the northern portion of the claims, a power grid that sits within 10 kilometers (6 miles) of the property, and two ocean ports that are located within 45 kilometers (30 miles) and 70 kilometers (45 miles) on paved highways. A favourable Canadian dollar exchange rate in relation to the US dollar, an experienced work force, favorable location with transportation infrastructure, and a stable socio-economic and political environment will contribute to the overall success of the White Rock project.
History of the White Rock Property
In 1997 CAG Enterprises Ltd. recognized the potential for large tonnage quartz and kaolin mineralization and staked 105 claims over the area. This action was prompted by the potential demand for kaolin at a newly constructed supercalendered paper plant in Port Hawkesbury, Nova Scotia. This new plant, built by Stora Enso, a Swedish/Finnish forestry company, uses approximately 140,000 tonnes of kaolin per year.
Preliminary work by CAG Enterprises Ltd. confirmed the presence of large intervals of quartz and kaolinized granite and the property was optioned to Black Bull in 1998. Black Bull completed geophysical surveys (I.P./RES.), trenching, diamond drilling and bulk sample testing on the property between 1998 and 2002, and again in 2004.
The latest drilling program has identified a total measured and indicated quartz resource of 12.1 million tonnes grading 97.4% SiO2, and an additional 16 million tonnes of an inferred quartz resource. The total measured and indicated kaolin resource is 4.8 million tonnes grading 24.2% kaolin with inferred kaolin resource estimated at 6.3 million tonnes. The zone of mineralization is open at depth and along strike. (References: MineTech International Limited, Resource Reports Black Bull Resources Inc., Yarmouth White Rock, Quartz, Kaolin, Mica Property dated February 24, 2003, and March 30, 2005).
Product and Market Development
Quartz
The physical whiteness, brightness and hardness of White Rock quartz combined with a chemical pureness of greater than 97% SiO2 make it attractive for a wide range of applications. Products can be produced in any size from fine sand to large blocks for landscaping or other architectural purposes. Testing indicates the ScotiaWhite™ quartz can also be upgraded to produce a high quality product with greater than 99.5% SiO2 for use in e-grade fiberglass and other specialty glass markets. The immense size, consistency and potential to expand the quartz resource of the White Rock Property will also provide customers with the security of a long-term supply of feedstock to meet their existing production and future expansion requirements.
In order to measure the market value of the quartz, the Company commissioned an independent market study. More than 130 samples of ScotiaWhite™ quartz were requested by and shipped to a select list of over 80 potential customers for testing. The study confirmed a market potential for ScotiaWhite™ quartz of approximately 250,000 tonnes per year as a value-added specialty product for use in applications such as architectural pre-cast concrete, engineered stone counter-tops, or a high quality white golf course bunker sand, and decorative landscape product.
There are currently no producers of white quartz rock in eastern North America with the whiteness, brightness, and chemical purity of Black Bull's resource. The market study also indicates that the quartz market merits premium pricing in the range of US$35 to US$800 per tonne depending on the size and grade of product.
Kaolin and Mica
Research and development work for kaolin and mica products are on-going. Kaolin is an industrial clay mineral and is used primarily in the paper industry as a filler and coating product. Kaolin may also be processed as a value-added product for other industry sectors such as plastics used in the automotive industry and metakaolin for the cement industry. Mica would be a value-added by-product derived from the processing of kaolin. Mica is a platy industrial mineral that is used in products that require chemical and heat resistant qualities or structural stability such as joint compounds, paint, and plastics.
Testing indicates that the average grade of kaolin in the White Rock resource is almost double the average for Cornwall (U.K.) clay deposits. All other factors (brightness, particle size, grit percentage, abrasion) meet standard filler clay specifications for paper manufacturing. Research also indicates that ScotiaWhite™ kaolin has unique features that can be processed to make more valuable specialty products required by Canadian and other paper manufacturers. Value-added products can be produced for other applications, such as ceramics, paint, and specialty concrete.
According to past information from Natural Resources Canada and Statistics Canada, Canada uses more than 711,000 tonnes per year of high-purity kaolin that must be imported from the U.K., the U.S.A. or Brazil as there are no producers in Canada. Ontario, Quebec, and the Atlantic Provinces account for more than 80% of Canadian kaolin consumption. Therefore, the White Rock property enjoys a significant transportation advantage due to its geographic location. Tests being conducted on the ScotiaWhite™ kaolin in the United Kingdom and United States continue to confirm excellent and encouraging results.
The ScotiaWhite™ mica has good white color and is mixed with kaolin and quartz and should be relatively easy to separate. It has the potential to be upgraded to a commercial quality product for use as a joint compound or a more valuable product for the paint and plastics industries. Tests of the Company's mica by experts in the United States confirm the high quality.
Mine Development and Production of Quartz Products
The quartz resource is covered with a minimal amount of overburden (2-5 meters) (3-6 yards) which makes it easy to mine by open pit methods. Production of quartz products is a simple process of blasting, crushing, size sorting, washing, storing, and shipping of material.
In April 2004, the Nova Scotia Department of Natural Resources issued the final approvals including the quartz mining permit for the property. The surface mine operation is a drill/blast/haul type operation where quartz materials will be extracted from two pits along the trend of the deposit and taken to facilities on-site for processing.
Once the final permits were received, the Company contracted Atcon Construction Inc. for infrastructure development which started immediately. The initial phase of development included clearing, road construction, crusher pads with storage area, and storm water holding ponds. The next phase, to be completed in advance of the construction of the processing plant, will be to prepare the plant site, expand the material storage pads, and complete any upgrades required on the road or holding ponds.
While the Company worked on the marketing and production of the fine quartz sands, in June and July 2004, it commenced a limited production of a coarse mixture of aggregate stone (approximately 20,000 tonnes of ½" to 1 ¼") for landscape and construction markets and a secondary mixture (approximately 20,000 tonnes of minus ½") consisting of various sizes of screened sands along with the small rock. The aggregate, though low in margin, was a product that original studies indicated was marketable. A primary crushing and screening system was used to produce the products.
During the spring 2005, construction of the quartz processing plant began. It is a "dry" processing plant located to the northeast of Highway 203, between the existing primary crushing area and the site boundary. It is being constructed in a modular fashion with units added as markets and product lines develop. The quartz will be washed in the crushing and screening stage to remove fines and then dried and screened. Module 1 is designed to produce up to 100,000 tonnes per year. The first module of the plant was commissioned during December 2005, with production commencing January 2006. An additional blast and crush was performed during December 2005.
ScotiaWhite™ quartz products will be delivered from the mine site in bulk or packaged form according to customer specifications and product size.
Research and Development
Research to improve the performance of products and develop new value-added product lines will be an on-going activity. The Company has co-funded a research program with the Canadian Government's Industrial Research Assistance Program (IRAP) to investigate the development of value-added kaolin products for testing by manufacturers of paper, ceramics, sanitary-ware, and other end-uses.
The company's most current information can be found in the latest quarterly or annual reports on this website, under the Corporate sub-section Financial Statements.
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