USA based Erdene Materials Corp. expects to start kaolin production from its resource, near Eatonton, Georgia, in 6-12 months after generating $2.5m to invest following a reverse takeover agreement with Canadian exploration company, Beta Minerals Inc.
Peter Akerley, president and chief executive officer of Erdene, told IM the deal with Beta Minerals would not only generate investment funds, but also “create a new public vehicle purely for its kaolin operations”, controlled by a new board of directors, also nominated by Erdene.
Production capacity at the 24.7m. tonne kaolin resource is expected to be announced in September 2008.
“The kaolin from this project will aimed at the US ceramics market,” added Akerley and indicated Erdene also planned to supply overseas markets.
As part of a reverse takeover agreement, Erdene and Deepstep Kaolin Co. LLC (DKC), are expected to transfer the ownership of its Georgian operation to Beta Minerals, and in return, Erdene and DKC will hold a 72% and 6% stake in Beta Minerals, respectively.
Akerley commented: “This is a mechanism to use a different company [Beta Minerals] to focus just on clay.”
Presently, Erdene has a j-v agreement with DKC that seeks to exploit its kaolin asset with DKC covering capital, operation costs and management operating from Erdene’s facility close to the mines (see IM December ’07, p.16).