Canadian Silicon Project Nears Lift-Off
Canadian Metals Inc. (CSE: CME) (“Canadian Metals”) is focused on the development of its Langis project, a high-purity silica deposit located in the province of Quebec. We have written before on how the company is rapidly positioning itself as a supplier of high purity silica and silicon alloy in North America via the construction of a cutting-edge processing plant in Baie-Comeau. The project is now on the verge of construction after receiving a critical environmental approval as well as confirmation of access to cheap and environmentally friendly Quebec hydroelectricity.
Silicon based materials can be formulated to provide a broad range of products from more durable, faster building materials with smarter electronic devices, solar panels and more efficient wind turbines. Right now, the world’s aluminum market accounts for nearly 50% of the silicon market; in 10 years, however, photovoltaic applications are widely expected to become the primary market. In fact, solar is the fastest growing segment of the renewable energy sector and so represents a colossal opportunity for anyone invested in high-grade silicon projects.
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Canadian Metals is on track to become a global supplier for a number of silicon-dependent industries and applications, including glass, ceramics, lighting, oil and gas, paint, plastic and rubber. The company also aims to become an integrated supplier to metallurgical industries including foundries, and participate in a wide range of civil, industrial, environmental and related applications. The products emerging from the plant will be silicon granules of 10 to 100mm in diameter, Silica fume, a co-product used as an additive in concrete, and slag, a co-product used for manganese alloys. These target markets are an integral part of the lives of millions of people every day.
Crucially, the company has now received its operating lease from the Quebec Ministry of Energy and Natural Resources; one of the two main regulatory approvals required to begin the operation of the Langis project, it was issued by the Quebec authorities after more than two years of official studies, community engagement and public consultation, demonstrating the broad support that the project enjoys from the citizens of St-Vianney and marking a major regulatory step.
Since silica deposits are essentially large piles of sand, the company needs not base its production decision on a feasibility study of mineral reserves; economic and technical viability is instead achieved through innovative processing, although the project does have promising economics (C$437.9 NPV / 21.8% IRR / 4.2 year PBP / 26 year quarry life). The factory will have three electric arc furnaces with a 120 MW power supply provided by the Hydro-Québec system as well as a cogeneration plant for heat recovery.
To this end, Canadian Metals recently received a favorable notice from the Department of Energy and Natural Resources confirming the granting of a 120 megawatt block from Hydro-Québec (at the discounted rate for economic development) for its silicon alloy plant in Baie-Comeau. With this energy, the company will be able to supply its silicon alloys plant with hydroelectric power, and having that, Canadian metals will make the Langis project one of the most environmentally responsible silicon alloy projects in the industry.
This project has been progressing with ease for some time now, and I fully expect that it will continue to do so. The company share price has grown by around 50% over the last month, presumably in anticipation of further sign-off, and as far as I’m concerned, the remaining approvals are mere formality, and we should expect the 50,000 tons per year of three core Langis products to emerge from the plant with very little resistance.