6.  Future Plans

2.6.1 Tin Mining

  Sea Minerals has successfully laid plans to eventual project
  development. Sourcing in appropriate mining equipment and expertise
  has been ongoing during the year, including application for a mining
  license and mining plans covering the maximum 50,000 rai (8,000
  hectares) allowable under the law.

  Our technical team have undergone training and processing of tin ore.
  Assets of the Company (which primarily is the proven reserves) amongst
  others include engineering drawings (see following pages) and
  equipment and trained technical personnel to process ore.

[]

[]

[]

2.6.2 Gold Mining

  Our strategy to improve and develop production.

  1) Oxide ore from T-1-8

  The Department of Primary Industries and Mines (DPIM) has permitted
  mining and transfer ore in T-1-8 area since 19 February 2008. The
  surface ore at T-1-8 comprised of oxide ore which was easier to
  process and at less cost. Fixed costs did not increase significantly
  as the existing staff could operate both mills efficiently. Only
  certain variable costs increased. Also, the Company could achieve
  greater economics of scale as ore from T-1-8 was transported and
  processed at T-1’s existing processing facilities rather than setting
  up separate production facilities.

  2) Major expansions to the existing plant

   

  The production levels increased upon the second ball mill,
  leach-adsorption detox tanks, and thickener, coming into operations.
  The second mill was able to process the transitional and sulfide ores
  more efficiently and which was also of higher grade than the oxide
  ore. The installation of the second ball mill and leach-adsorption
  detox tanks was completed in December 2007 and the thickener was
  completed in February 2008.

  The new flotation plant is estimated to cost approximately USD 3 M and
  is expected to be completed by 31^(st) March 2009, with commissioning
  expected by April 2009.

  We expect that 80% of the gold recovered for sale to smelter without
  the using reagents like SMBS and cyanide. This would translate into
  highly significant costs savings going forward.

  2.1) Flotation Process

  Flotation is a process that principally deals with base metals, such
  as copper, lead, zinc, and nickel that usually occur in a mineral from
  which they cannot be separated by normal milling. Instead, the mill
  separates the mineral(s) from the ore by flotation to produce
  “concentrate(s),” which is the typical product from a base metal mine.
  The concentrates are then transported to a smelter and refinery that
  are usually a considerable distance away.

  What is the purpose of a flotation unit?

  • To cost effectively remove valuable minerals from a slurry.

  How is this done?

  • Flotation uses air forced into the cell to liberate particles of
  valuable material that are attracted to rising air bubbles, hence
  separating them from the host slurry.

  Basic Theory of Flotation

  • Air is injected into the cells to create bubbles.

  • Reagents are also added to react with the valuable mineral and make
  the mineral particles hydrophobic. (Water repelling)

  • This causes the particles to attach to the bubbles.

  • These bubbles rise to the surface of the flotation unit to form a
  froth which is removed via the launders.

  • The froth is then cleaned by passing it through a series of smaller
  flotation units.

  • This process is repeated until the final grade concentrate is
  achieved.

  • The remaining slurry exits from the bottom of the flotation cell and
  continues through the other cells

  • Other reagents are often added to ensure maximum recovery of the
  mineral.

  []

  View of Outoutec Flotation Cells that are being used at Tunkum.

  The concentrates often contain small quantities of precious metals
  (enhancing value) and may contain undesirable impurities, such as
  mercury or arsenic (reducing value). The premium paid by smelters for
  precious metal content is referred to as a “credit” and the reduction
  in payment because of impurities (or high moisture content) is most
  often called a “penalty.”

  Base metal compounds are typically sulfides and most often occur in
  the ore along with other (unwanted) iron sulfide compounds, such as
  pyrite, marcasite, pyrrhotite, and arsenopyrite. Base metal ores from
  near the surface may have had the sulfide compounds converted to
  oxides by the force of nature. The oxide zone of a base metal deposit
  in hard rock is typically only in the order of 10 m deep; however,
  there are cases where the oxidation penetrates to a depth of over 120
  m. Oxide ores (particularly partially oxidized ores or “over-oxidized”
  ores that contain a native base metal) represent a challenge for the
  mill, which is normally designed to be efficient in dealing only with
  sulfide ores. On the other hand, oxide ores lend themselves to very
  economical extraction by direct cyanide leaching (for gold and silver)
  or SX-EW which is confined to copper ores. This has been the case at
  Tungkum. However, the bottom of the oxide ores has essentially been
  reached, and the older direct leaching with dilute cyanide is no
  longer effective.

  The principal gold bearing sulphide mineral is chalcopyrite (CuFeS₂),
  which contains the copper present. Next, there is a massive amount of
  pyrrhotite (FeS) present. The plans are to make 2 concentrates.

  A copper concentrate will assay between 18 and 25% Cu, and carry
  between 60 to 80 grams per tonne of Au. It will also assay about 30%
  S. The chemical conditions will be adjusted, and the tailings from
  this concentrate will be floated to produce an iron sulphide
  concentrate. This will average 53% Fe and 33 % S. Concentrates like
  this are in demand in southern China as a source of both sulphur and
  iron. The sulphur is roasted out of the concentrate to make sulphuric
  cid. If there are any traces of gold or silver, they are subsequently
  removed by leaching, and final tailings sold as “purple ore”, which is
  usually regarded as a premium feed for small to middle sized blast
  furnaces.