Mr. Christopher Ecclestone reports

GEODEX CEO GIVES STRATEGIC UPDATE

Geodex Minerals Ltd. is giving an update on its strategic view for the direction for the company over the coming year.

As the company has previously indicated, Geodex is in the process of repositioning from a company focused upon a geographical area (that is, New Brunswick) to one oriented toward attractive specialty metals deposits (with an emphasis on antimony and tin) around the globe. Projecting from its traditional base in Canada's Maritime provinces, Geodex intends on pursuing opportunities in these metals both there and in Spain, around the Mediterranean basin and in other traditional mining regions by aggregating past-producing and producing mines in these metals.

The attractions of both metals are their relatively high price per tonne. In the case of antimony, this price attractiveness is augmented by the metal having (in most occurrences) rather straightforward metallurgy for processing combined with generally good grades (commonly 5 per cent to 20 per cent). Deposits with less than 3-per-cent grades are rarely exploited.

Current antimony market

Prices for antimony trioxide are firm between $9,000 and $10,000 per tonne and have been for a while now. Demand is also good, with growth in volumes being around 2 per cent to 4 per cent per annum. When the price peaked at over $14,000 per tonne a couple of years back, there was some dilution of the antimony trioxide grade in fire-retardant plastic mixes, which now seems to have run its course.

The exact size of the market is somewhat vague due to unreliable Chinese statistics and the fact that a large chunk of production is artisanal (Burma, Bolivia, Honduras, Laos and Turkey) and ore, concentrate and end-product antimony are smuggled in and out of China. This may amount to 20 per cent of global supply.

Key features to note:

• Antimony occurs in veins and less commonly in lenses/pods.
• It is often difficult to drill and target these veins to enable obtaining a sufficient resource to justify long mine lives.
• Mining is mainly underground, pursuing the veins, though open pit mining (such as occurred at the company's Jacaranda pit) is utilized when the deposit is very near surface or exceptionally high grade. The Mina Jacaranda, for instance, has the antimony mineralization layered in schists.
• Many antimony mines go on for a very long time. The largest antimony mine in the world (Twinkling Star in China) was discovered in the 1500s, started serious mining in the 1850s, and is still going and produces over 20 per cent of global supply. Mandalay's Costerfield mine has operated on and off since the 1860s, and the Consolidated Murchison mine in South Africa has operated since the 1940s. Generally, antimony mines operate on the basis of having a resource in front of them of only a couple of years at the existing mining rate, sometimes less.
• Global production is estimated at around 165,000 tonnes per annum.
• Non-Chinese production at the current time is estimated at 30 per cent to 40 per cent of the total and consists of artisanal miners, the Costerfield mine (3,700 tonnes per annum to 4,500 tonnes per annum) and the Cons Murch mine (4,500 tonnes per annum to 5,500 tonnes per annum). Both of the latter are antimony/gold mines. The Russian group Geopromining reputedly produces around 6,000 tonnes per annum from a number of mines scattered around ex-CIS (Commonwealth of Independent States) nations. There is a group, called Anzob, that supposedly produces over 9,000 tonnes per annum out of Tajikistan, but that lacks reliable confirmation. The mothballed (since 2008) Hillgrove mine in New South Wales in Australia is reputedly returning to production. United States antimony sources its production from a number of quasi-artisanal operators in Mexico. The Beaver Brook mine, which opened several years ago in Newfoundland, was shuttered after being bought by Chinese investors.

Target areas

Thus far Geodex has properties in Nova Scotia and Spain. Most likely future additions will be around the Mediterranean basin, with some consideration being given also to either Mexico or Peru. The company has also identified some interesting past-producing properties in Australia (Queensland and Victoria). This enables the company to diversify geographically and minimize political risk.

Capital expenditure -- another salient consideration

To produce around 3,500 tonnes per annum of antimony at a deposit grading 8 per cent (for example), the mining rate would need to be only 120 tonnes per day. The company has priced a number of crush/grind/gravity separation set-ups sourced out of China with 200-tonne-per-day throughput, and the quote for such a set-up was very modest. Naturally there would be a number of additional cost, such as shipping, duties, trucking, site preparation, assembly and hookup of utilities, but the message is clear, at least from the kit point of view, that this mode of processing does not involve high capex. When one considers the froth flotation process (combined with some of the aforementioned crush/grind components), estimates indicate capex might be up to $3-million.

In either case it is evident that putative antimony producers are not facing significant processing capex costs for the production of a relatively high-value-per-annum output of antimony concentrate. In addition, antimony roasting (through rotary kilns, for example) to take the concentrate to the next level is also relatively capex light.

Key goals:

• Acquisition of properties through initial staking or low upfront option deals, as per the recent acquisitions already effected of West Gore, Canada (see GXM news release dated June 25, 2014), and Mina Jacaranda, Spain (see GXM news release dated Aug. 27, 2014);
• Production, whether from mining or tolling, within one year;
• Targeting production of 5,000 tonnes per annum to 10,000 tonnes per annum of antimony ore within three years;
• Payment of dividends.

Geodex aims to fill the gap left by the paucity of investment opportunities in antimony (and tin) mining in Western capital markets. The company aims to do this by accumulating past-producing and producing assets and moving to a revenue-generating status as fast as is possible.

The creation of a vertically integrated antimony producer/processor should be welcome news for antimony traders and end-users, as they have long been subject to the capricious actions of the dominant (but declining) player, China.

We seek Safe Harbor.