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Execution of Research, Development and The Creation of Efficient Technologies of Rare Earth Production 1

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Page 1: Execution of Research, Development and The Creation of ... · Execution of Research, Development and The Creation of Efficient Technologies of Rare Earth Production 1 . Statements

Execution of Research, Development and The Creation of Efficient Technologies of Rare Earth Production

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Statements contained in this presentation which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences, without limiting the generality of the following, include: risks inherent in exploration activities; volatility and sensitivity to market prices for uranium and rare earths; volatility and sensitivity to capital market fluctuations; the impact of exploration competition; the ability to raise funds through private or public equity financings; imprecision in resource and reserve estimates; environmental and safety risks including increased regulatory burdens; unexpected geological or hydrological conditions; a possible deterioration in political support for nuclear energy and rare earth technologies; changes in government regulations and policies, including trade laws and policies; demand for nuclear power and rare earth products; failure to obtain necessary permits and approvals from government authorities; weather and other natural phenomena; and other exploration, development, operating, financial market and regulatory risks. Although Stans Energy Corp. believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this release. Stans Energy Corp. disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise Cautionary Note to United States and Other Investors Concerning Estimates of Measured, Indicated and Inferred Resources: Certain tables may use the terms “Measured”, “Indicated” and “Inferred” Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, however, the United States Securities and Exchange Commission does not recognize them. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of a Mineral Resource is economically or legally mineable.

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Stans Energy is focused on re-starting a past producing Rare Earth Elements mine and processing facility in Kyrgyzstan Kutessay II Mine:

• Past producing open pit mining operation

• Produced equal quantities of heavy and light rare earth elements

• Known metallurgical processes

• 20-year mining license in place

Kashka Rare Earth Processing Facility (KRP): • Processed ore from Kutessay II Mine for 30 years • Produced 120 metal, alloy, and oxide products • Start-Up of Operational Testing for REO production in Q3 2012 • Private rail terminal provides access to Russia, Europe, and Asia

Strong Board, Technical Advisors, and Management:

• Many involved with Kutessay II and the KRP prior to 1991

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Stock Exchange HRE (TSX-Venture)

Shares Outstanding

as at June 30, 2012

157,263,986

Warrants 8,475,476

Options 14,468,333

Total (fully diluted) 180,207,795

Market Cap C$111m

Share price (Nov. 1) C$0.71

52 week high/low C$1.59/ C$0.28

Net cash C$14 m

Debt Nil

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Major REEs to be

produced by

Stans Energy Properties Industry Use

Yttrium

Terbium Reduces

Europium Weight

Dysprosium Emissions

Gadolinium Energy Consumption

Holmium

Erbium Allows

Thulium Greater Efficiency

Luteium Performance

Ytterbium Miniaturizatoin

Lanthanum Speed

Cerium Durability

Praseodymium Thermal Stability

Neodymium

Samarium

High Tech Defense Applications

Hybrid Electric Vehicles Green Tech

Water Treatment Other Applications

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0

50,000

100,000

150,000

200,000

250,000

2005 2006 2007 2008 2009 2010 2011f 2012f 2013f 2014f 2015f

ROW Supply China SupplyChina Demand Adjusted Global Demand

(To

nn

es o

f R

EO)

Global REE Demand Pacing to Outstrip Supply

Source: IMCOA – Industrial Mineral Company of Australia

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Source: US Department of Energy/ TMR

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Source: US Department of Energy

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• Present – 2015 • 2015 - 2025

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Kyrgyzstan

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CHINA

RUSSIA

JAPAN

EUROPE

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• 100% ownership of former Soviet-era mine

• Produced 80% of FSU’s REE needs

• March 2011: Pit-contained mineral resources – Measured + Indicated: 45,650 tonnes of contained TREO

– Inferred: 3,560 tonnes of contained TREO

• Bankable Feasibility Study (BFS) to commence in Q3 2012

• 20-year mining license and all permits are in place

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Kutessay II

Kutessay III

Aktyuz

Aktyuz Ore Field: Kutessay II REE Mine And Exploration Areas

Kalesay

Aktyuz Mill

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Kutessay II REE Mine

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• Primary goal of the exploration drilling at the Aktyuz Orefield license area in 2011 is the expansion of Kutessay II and the Aktyuz REE deposits

• At Kutessay II a 2100m drill program will explore below the 2100m level of the Kutessay mine bottom.

• Kutessay II drilling will consist of four 450-570m holes.

• At the Aktyuz mine, a 900m drill program will explore the Aktyuz deposit in order to study the geological potential of recently discovered ore-bearing zones.

• Aktyuz drilling will consist of three 300m holes.

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NEW MINERALIZED

ZONE

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• 100 % ownership • Processed Kutessay II ores for 30 years • 120 metal, alloy, and oxide products • Operational Testing has commenced • 50 kg of Dysprosium produced using Ion Exchange

technology – Q3 2012 • Dysprosium, Terbium, Gadolinium metals

produced in Q3 2012 • Private Rail Terminal provides access to Asia,

Europe, and Russia • Facility originally designed by VNIIHT, one of Stans

Energy’s core consultants

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• 2011 Acquisition: $5,500,000 USD

• Improvements 2011: $1,284,143 USD • Improvements 2012: $3,073,627 USD

• Improvements To Date: $4,357,770 USD

Improvements: Capital improvements, equipment overhaul,

electrical upgrades, water and heating systems, steam generation, roof repairs, sewage and tailings pipe repairs

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24 30 year proven track record of 99.99% oxide production

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REE Breakdown by Value (Asian Metals FOB prices in USD Nov 1, 2012)

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Element Oxide REEs % REO USD/kg

Dysprosium Dy 6.14 870

Yttrium Y 26.73 55

Terbium Tb 1.55 1440

Neodymium Nd 8.18 86

Europium Eu 0.23 1920

Erbium Er 3.25 95

Praseodymium Pr 3.78 85

Gadolinium Gd 3.59 63

Samarium Sm 4.1 30

Lutetium Lu 0.5 1,358

Cerium Ce 19.68 16

Lanthanum La 16.55 16

CREO = 90% of projected gross revenues

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VNIIHT’S ROLE

• Stans Energy’s Bankable Feasibility Study (Q3 2012) will be conducted under the guidance of VNIIHT. VNIIHT’s sixty years of chemical technology experience combined with their capabilities of executing the complete cycle of rare earths research, development, and production will give Stans Energy a significant advantage relative to its competitors.

• VNIIHT will also assist with evaluation and acquisition of other HREE properties in areas of the Former Soviet Union (FSU)

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VNIIHT ACHIEVEMENTS Technologies developed in the Institute became the production cycle

base for over 20 hydrometallurgical plants Over 150 sorbents, extractants and resins were engineered Over 3600 developments were industrially implemented Over 2600 inventors certificates and patents were issued 7 minerals were discovered Over 100 PhDs are employed

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Kyrgyz-Russian

Slavic University VNIIHT

GEOTEP

IGPMG RAS

ARRIMR

Russia Kyrgyzstan

Canada

Honorary Consul of

the Kyrgyz Republic

for Canada

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Asiarudproject

Ecoservice

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CORPORATE STRATEGY • Bankable Feasibility Study commencing in H2-2012 • Advance off-take agreement discussions with end users • Continue to explore:

• August 2012 - deep drilling of areas of know mineralization • 2829m program to delineate pit contained blind ore-bodies

• Refurbish Kashka Rare Earth Processing Facility (KRP) • Enhance recovery process with new technology • Continued optimization for REO production

• Build out operating and construction teams • Assess HREE and joint-venture opportunities

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2012 2013 2014

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Units

VNIIHT - Completion of new cracking technology design

-

Bankable Feasibility Study -

Binding off-take agreements -

Improvements of Mine Buildings and Facilities

3 buildings

Reconstruction of head water intake facilities in Aktyuz Township

-

Reconstruction of the open pit mine and mill connecting road

1 road

Construction of IM-50 chemical agent production site

-

Reconstruction of Tailing Pond and infrastructure facilities (for 300k tonne production capacity per annum)

-

Construction of 1st order shift camp -

Excavation of stripping mine workings at the underground mine

1,800 meters

Ore mining 20k tonnes

Ore mining 200k tonnes

Supplementary exploration of deep horizons and flanks of deposit

USD $1-2 million

TIME TABLES TO PRODUCTION

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Stans Energy’s Social Responsibility Code • Stans Energy Corp. vows to act as a responsible corporate citizen, and is proud to be actively

engaged in the world-wide promotion of the PDAC’s Environmental Excellence program (e3), which outlines best practice methods and emphasizes social responsibility.

• e3 Plus provides the means for firms to reduce social and environmental risk to their projects, to benefit local communities and to enable companies to become world leaders in corporate social responsibility.

• By implementing e3 Plus principles into daily operations, Stans Energy strives to integrate social, environmental and health and safety values into the decision making process, in a transparent and accountable manner and thereby acting responsibly and contributing to the well being of society. Stans Energy will accomplish this through:

• Assessing and reducing risks • Minimizing negative impacts (social and environmental) • Optimizing the benefits to all involved – local communities the host country,

investors and the company

http://www.pdac.ca/e3plus

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Community Building Initiatives Stans Energy Corp is committed to making a positive difference in the communities in which we operate. Recently in the local town of Aktyuz, Stans helped refurbish a school and provided scholarships to top students studying mining and geology. The company has hired local residents to work on the Aktyuz Ore Field, and is providing skills training in an effort to increase the economic well-being to people in the region. Stans Energy enjoys tremendous backing by the local community as demonstrated by a recent

letter written by local residents in support of Stans Energy’s ongoing initiatives.

Gennady Savchenko, Managing Director of Stans KG, discussing the plans for the Aktyuz Ore Field

Local leaders and residents of Aktyuz in a meeting with Stans Energy’s Representatives

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Stans Energy KG’s Economic Footprint

• During the nine month period ended September 30, 2012: • Exploration and Evaluation expenditures - +5.7% $1,028k (‘12), $972k (‘11) • Operating expenditures - + 89% $ 140k (‘12), $ 74k (‘11) • Wages - +151% $ 698K (‘12), $277k (‘11)

• On May 26/11, Stans completed its USD$5,500,000 transaction to purchase this plant

and legally renamed it to Kashka REE Plant Ltd. (KRP). Since this time the company has spend an additional USD$4,400,000 ( 198,000,000 Kyrgyz SOMs)

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Stans Energy KG’s Economic Impact Over the past six years Stans has invested a considerable amount of money in Kyrgyzstan, including obtaining mining licenses and exploring and developing its mine sites. The total amount of investments amounted to $18,000,000 (800,000,000 Kyrgyz Soms) as of June 1, 2012. • As of today has 128 employees including mining engineers, metallurgists, geologists, chemical

technologists and various maintenance and administrative personnel. Once in full production Stans envisions having as many as 500+ employees

• Over the past year, executives of Stans have conducted site visits with numerous Fortune 500 companies and international government agencies directly contributing to the local service industry and further raising the profile of Kyrgyzstan with global decision makers.

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President, CEO & Director, Stans Energy Corp; ROBERT MACKAY, BSc Mining Robert worked in various facets of Mineral Exploration from 1969 to 1975 including diamond drilling, geophysics, geological

mapping and prospecting. In 1975, Robert graduated from the Haileybury School of Mines. From 1975 to 1980, he gained

extensive experience in mining, including mine planning, surveying, grade control, industrial engineering, open pit and

underground production. Robert graduated from The South Dakota School of Mines Technology in 1980 with a Mining Engineering

Degree and over the next twenty years he worked in the investment business and was a Vice President of two national investment

firms. In 2000 Robert started a consulting business and over the next 5 years he worked as a Project Engineer on projects in

Canada, United States, China and Africa.

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Chief Operating Officer & Director; BORIS ARYEV, MSc, P.eng After migrating to Canada in 1983, he worked as a software development consultant with NCR Canada Limited & OPTIMOD Inc.

until 1986 and then with Verifact Inc. until 1996. In 1990, Boris became and still is President of Marhope Systems Inc.,

providing management and consulting services to both public and private sectors. Boris is the founding Director of the

Canada-Eurasia-Russia Business Association, founder and chairman of its Mining & Northern Development Committees and co-

founder of IEC Minerals Working Group.

Vice President of Operations; DAVID NEWTON, MSc. During his forty year career in various mine management functions, Mr. Newton has held increasingly senior positions with such

firms as Anglo American Corporation and Newmont Gold. Throughout the course of his distinguished career, Mr. Newton has

overseen both open-pit and underground mining operations most recently having worked in jurisdictions as diverse as:

Democratic Republic of Congo, Armenia, Georgia, Uzbekistan, Ghana, United Kingdom, and South Africa.

Managing Director of STANS ENERGY KG; DR. GENNADY SAVCHENKO, CGeol, FGS, Qualified Person (QP) Dr. Savchenko graduated from Frunze Polytechnical Institute with a Mining Engineer-Geologist Diploma and Ph. D in

Geology & Mineralogy in 1971, then worked till 1981 in exploration & mining enterprises for Uranium in Kazakhstan,

East Germany and China. From 2000 to 2002, Dr. Savchenko was Deputy Chief in the Department of Geology &

Investment for the Kyrgyz State Geology & Mineral Resources Agency.

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Director; DR. DOUGLAS H UNDERHILL, CPG, PhD, MSc, BA (Geology), MBA, Qualified Person (QP) From 1993 to 2002, Doug was a Uranium Resource & Production Specialist for International Atomic Energy Agency in

Vienna. He has over 40 years of minerals industry experience with nearly 30 of those years dedicated to uranium

(including experience in Kazakhstan & Uzbekistan). As Senior Consultant with Nuclear Assurance Corporation (USA), he is

responsible for consulting on Uranium supply strategy and maintaining a worldwide uranium production projects database.

Doug represented IAEA in Joint IAEA-NEA Uranium Group. Has an MBA in Strategic Planning & Finance.

Chief Financial Officer; ANNA KURANOVA, CGA, Anna Kuranova has over 13 years of financial and operational experience in the investment industry, overseeing financial

functions of public mining companies in Canada and in Russia. Mrs. Kuraonva served as a financial controller at both High

River Gold (TSX-V: HRG) and as a Site Controller at Kinross (TSX: K) Having extensive experience in working on mines that

are in operations, Mrs. Kuranova specialty in operational monitoring and reporting is tremendously valuable to the

company.

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Vice - Chairman of the Board; Gordon R Baker, Q.C. In 1972, Gordon was called to the Bar of Ontario, then in 1983, he was appointed to the Queens Counsel. A highly

regarded corporate law specialist, Gordon holds extensive experience in business law (mergers, acquisitions, joint

ventures, financing & structuring) and has acted as counsel (including as a registered lobbyist) advising on

government relations (strategic planning, negotiation, compliance issues).

Chairman of the Board; RODNEY IRWIN, MA , Honorary Consul of Kyrgyz Republic in Canada From 1972 to 1974, Rodney joined the Department of External Affairs, in Ottawa, then in 1978 through to 1980, he served abroad

in New-Delhi, Moscow & Port of Spain. From 1988 to 1990 Rodney served as High Commissioner, then in 1992, was named

Ambassador to Yugoslavia. Due to the war with Croatia, he served as Ambassador to Albania, Bulgaria, Slovenia & Croatia. From

1993 to 1996, he was Ambassador to Hungary while retaining his Balkan country accreditations. From 1999 to 2003, he served as

Ambassador to the Russian Federation with concurrent accreditation to the Republics of Armenia & Uzbekistan.

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Advisor; DR. GENNADY SARYCHEV Director of the Leading Research Institute of Chemical Technology (VNIIHT) is a former professor of the Moscow

Engineering Physics Institute. He has held the position of Director/Department Head of the following institutions:

Department of Scientific Research and Development, Department of Scientific Research Work, Department of State

Policy on Science, Innovations and Intellectual Property, Department Head of Planning and Construction of

Infrastructure Objects for Special Economic Zones. Dr. Sarychev adds invaluable experience to Stans Energy in areas of

international cooperation amongst the scientific and business communities.

Advisor; MR. JEAN PAUL TOGNET, Chemical and Nuclear Engineer Mr. Tognet is a French chemist and nuclear engineer who spent his 35 year business career in the Rare Earths sector. He

started with ore processing projects specializing in beneficiation and cracking at the Pechiney-St. Gobain Research Center.

In 1982, he began to lead the chemical engineering department at the Rhone-Poulenc Rare Earths plant in La Rochelle

France. Then, as Industrial and Raw Materials Director from 1992-1999, he managed the development of Rhone Poulenc’s

Rare Earth processing plants in France, USA, Japan, and China. After Rhone Poulenc’s name changed to Rhodia (now a

branch of Solvay), he continued in global upstream management and finally was charged with the evaluation of new

international Rare Earth projects until his retirement in 2005.

Advisor; DR. VALERY KOSYNKIN; Ph.D., Professor Dr. Kosynkin is one of the world’s preeminent chemists and metallurgists for Rare Earth Elements (REEs). Dr. Kosynkin

holds a doctorate of philosophy from Moscow State University. His dissertation was on uranium and the development of

REEs through processing loparite concentrate. Since 1959, Dr. Kosynkin has been employed by VNIIHT – The Russian

Leading Institute of Chemical Technology, initially as a research in uranium technologies, and from 1973 as the Head of

Research and Development for REE chemistry and technology. Dr. Kosynkin has overseen the commissioning of REE

production and extraction facilities in Russia, Ukraine, Estonia, and Kazakhstan. In addition to his work at VNIIHT, Dr.

Kosynkin served as a USSR IAEA representative from 1968-1973. He has lectured on REE metallurgy and chemistry in

Russia, China and Korea.

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Advisor; DR. MARAT I FAZLULLIN Leading Russian expert on uranium, gold, and rare earths. Dr. Fazlullin is a renowned Professor, Doctor of (engineering)

Science, member of the Mineral Resources International Academy and an Honorable Geologist of the Russian Federation.

He has written over 300 publications on Uranium and gold-ore deposits including treatment by the heap and

underground leaching methods. He also lead prospecting teams and expeditions for poly-metallic, mercury deposits, oil

and gas fields located in Kyrgyzstan, Tajikistan & Algeria as a Chief Engineer.

Advisor; MR. JAMES B. HEDRICK Mr. Hedrick is a rare-earth elements, scandium, yttrium, thorium, zirconium, hafnium, and the mica group of minerals

expert. James possesses a wealth of knowledge with over 31 year of experience in Mineral commodities. Mr. Hedrick

served as Chairman and Executive secretary of the U.S. Government’s Minerals, Metals, and Materials Advisory Board from

1981 to 1995, and chaired two sessions on the rare-earth elements and one on strategic and critical minerals for The

Society for Mining, Metallurgy, and Exploration (SME).

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Advisor; MR. JAMES ALLAN BASc (Geological Engineering) MSc (Geology, Engineering) Mr. Allan is a Registered Professional Engineer with the Association of Professional Engineers, Geologists and Geophysicists

of Alberta (APEGGA). James has over 45 years of experience working with several major mining and petroleum companies

and as an independent consultant in mining exploration and exploration management, mineral property evaluation and

mining geology. James has been involved in the exploration for, and evaluation of, rare earth deposits both as manager of

exploration in Canada for a large rare earth company from 1982 to 1990 and as an independent consultant.

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Kutessay III

TSX-V: HRE OTCQX: HREEF

STANS ENERGY CORP. 8 King St. East, Suite 205 Toronto, ON, M5C 1B5

Tel: 647 426 1865 Fax 647 426 1869 www.stansenergy.com [email protected]

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