EnerGulf Resources Inc.

Albania – Chromite

BULQIZA-BATRA CHROMITE LICENCE

ALBANIA

EnerGulf controls chromite licences covering the most prospective and productive chromite terrain in Albania. Throughout the communist era that lasted from the Second World War until 1989, Albania was one of the primary producers of chromite in the world. In the 1980’s, Albania was the third largest chromite producer in the world with over one million tonnes produced annually. Some 80% came from the Bulqiza and Batra mines* that underlie EnerGulf’s principal chromite licence. This chromite was, and still is, recognised as some of the finest quality in the world due to its high chrome to iron ratio that commonly exceeds 2.5:1 with best grades in excess of 3:1. This places Albania along with Kazakhstan and Turkey as countries that produce high grade (+38% Cr2O3) and high quality premium-priced direct shipping ore that goes into high quality stainless steel.

EnerGulf’s licences are at the heart of the most prolific producing area of the last 50 years and where more than 20 million tonnes have been produced making the orebody** hosting the Bulqiza and Batra mines* the largest ophiolite-hosted chromite deposit in the world. EnerGulf’s licences consist of the 1.013 km2 Qafe Burreli Licence and the 5.77 km2 Bulqiza-Batra Licence for a total of 6.90 km2 in two distinct project areas containing numerous chromite showings, prospects and past-producing mines. The Bulqiza-Batra Licence includes the east and west mineralized extensions of the fold structure controlling and hosting the chromite ores in the Bulqiza and Batra mines* and also includes much of the past producing Thekna Mine which is reported to host an historical resource of 330,000 tonnes grading +40% Cr2O3 and where Columbus Copper’s drilling in 2011 has demonstrated scope for significant expansion.

Chromite is essential in the production of stainless steel. Demand is fed by China and, to some extent, India. China produces some 40% of the world’s stainless steel and production has risen by an average 22% over the last decade. China’s stainless steel producers all have plans to increase production over the next decade and demand for Albanian chromite is expected to rise accordingly. Currently, Chinese companies buy about 90% of the chromite exported from Albania.

Demand over recent years for 40% Cr2O3 lumpy ores has meant prices ranging from $160 to more than $600 per tonne, but generally at or above $200 per tonne CIF. Despite the geological complexity of Albanian deposits, combined mining and transportation costs are usually significantly below $100 per tonne. A deposit as small as 5 million tonnes could be capable of sustaining a 1,000 tonne a day mine for over 15 years. Lower grade disseminated and banded material can be processed into more than 50% Cr2O3 with chrome to iron ratio exceeding 2.6:1, which can fetch higher prices from stainless steel makers.

EnerGulf is now considering the best path to advance the projects.

 

* Some portions of the historical Bulqiza and Batra mines are not included as part of EnerGulf’s Bulqiza-Batra Licence.

** The term “orebody” is used in the historical sense and is not meant to imply current economic viability.

 
 
 
- EnerGulf Resources Inc.