 White Mountain Titanium Corporation
Douglas J. Newby
Oct 21, 2004
White Mountain Titanium Corporation is an emerging specialty
industrial minerals company. The Company owns 100% of a high
grade rutile deposit located in the coastal mountain range in
Region III of northern Chile. Rutile is the preferred feedstock
for producing titanium dioxide, which, in turn, is a key ingredient
in the paint, plastics and paper industries worldwide owing to
its high refractive index, opacity, and the purity of its white
color. The global titanium dioxide pigment market approximates
$8 billion a year.
Work-to-date at Cerro Blanco has identified approximately 145
million tons of mineralized material grading 1.9% titanium dioxide,
worth about $1 billion in the ground, with additional identified
exploration targets that could double that number.
We believe that White Mountain Titanium has the potential to
become a major supplier of premium quality titanium dioxide feedstock.
As yet, the Company is virtually unknown in the investment community.
- White Mountain is a U.S. company
focused exclusively on development of the Cerro Blanco rutile
deposit in Chile.
.
- Rutile is the preferred raw
material for the production of titanium dioxide, which is used
extensively as pigment in the paint, plastics and paper industries.
.
- Titanium is one of the most
common metals. However, it is generally found in low concentrations
as ilmenite, a compound with iron that is difficult to process.
Rutile, which is a chemically simpler compound, is easier to
process in an environmentally friendly fashion and typically
produces a higher-grade material.
.
- Hard rock deposits of ilmenite
are common, but many have little commercial value. Most of the
world's rutile is extracted from beach sands where the oceans
have naturally concentrated the mineral. Cerro Blanco is unique
because of the high grade of its hard rock rutile deposit.
.
- Cerro Blanco could be in production
as early as 2007 with revenues ramping up rapidly to approximately
$100 million a year. The project is supported by excellent mining
infrastructure and, located in the low coastal mountain range
at an altitude of approximately 3,000 feet, the access and operating
climate is excellent, especially when compared with mining projects
in the high Andes. Water, often a problem in the Atacama Desert
of northern Chile, is available from the Huasco river basin nearby.
Valuation considerations
- If Cerro Blanco is developed,
we believe the equity value of the project once it is in production
could be in the range of $80 million to $240 million, depending
upon assumptions of commodity price and other factors. In our
opinion, even the assumptions for the high end of the range are
not particularly aggressive. This compares with the current market
capitalization of approximately $21 million.
.
- We anticipate three key developments
in the next several months: an updated resource calculation including
recent drilling, a metallurgical report by Lakefield Research,
and finally a pre-feasibility study in early 2005. A full, bankable
feasibility study is scheduled for late 2005. We believe all
these reports will be value drivers for the stock.
To read the full report please click
here.
White Mountain Titanium Corporation website: www.wmtcorp.com.
Symbol: WMTM:OTC
Stock price: US$1.50 at Oct 20, 2004
October 21, 2004
Douglas J. Newby
Proteus Capital Corp.
©Copyright 2004 by Proteus
Capital Corp. All rights reserved.
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