Adex Mining Inc. (“Adex”) is a Canadian junior mining company with 100% ownership in the
Mount Pleasant Mine Property located in Charlotte County, New Brunswick, Canada. According
to a Government of Canada report, Mount Pleasant is “North America’s largest tin deposit and
the world’s largest reserve of indium” (Wright 1996, p. 61.1).
The North Zone contains an updated NI 43-101 resource estimate including 12.4 million
indicated tonnes averaging 0.38% tin, 0.86% zinc, and 64 ppm indium, as well as an inferred
resource of 2.8 million tonnes averaging 0.30% tin, 1.13% zinc, and 70 ppm indicum (Adex
2012b). It is not clear yet if Adex will build the mine with the capacity to produce indium sponge
or whether it will produce an indium-rich zinc concentrate only. An NI 43-101 compliant report
for the property contains preliminary economic estimates about the feasibility of three
alternatives. The higher net present value (but also higher capital cost options) presented in the
NI-43-101 report would see Adex produce refined zinc metal and indium sponge.
Should Adex develop the property to produce a final indium sponge, planned production of
indium sponge of minimum 95% purity based on an 850 tpd nameplate capacity could be 40.5
tpa, equivalent to approximately 38.5 tpa at 99.998% (4N8) purity. We estimate that total indium
production costs would be ~$380/kg of refined metal based on analysis of preliminary economic
estimates in Thibault et al. (2010) (see Appendix D for more information). The cost model for
the Mount Pleasant deposits forms the backbone of our Monte Carlo simulation used to generate
indium supply curves, so significant additional detail regarding this property is included in
4.1.2 Malku Khota, Bolivia
The silver-indium Malku Khota project, previously owned by South American Silver
Corporation, is one of the world’s largest undeveloped silver and indium resources with an NI
43-101 compliant indicated resource of 230.3 million ounces of silver and 1,481 tonnes of
indium, and an inferred resource of 140 million ounces silver and 935 tonnes indium. An
updated preliminary economic assessment was prepared in May 2011, which showed robust
economics for a bulk mineable heap leach operation. Located in the eastern part of the Bolivian
Altiplano at elevations of 3,800–4,600 meters above mean sea level, the project is accessible by
dirt road and commercial power is within about 20 kilometers of the site (Armitage et al. 2011).
Silver and indium mineralization at Malku Khota begins at the surface and remains open at
depth. The preliminary economic assessment contemplates the construction and operation of a
40,000 tpd open pit acid-chloride heap leach operation. As detailed in Table 14, ~200 million
tonnes of leach material are planned to be mined over a 15-year mine life, with production of
13.2 million ounces of silver per year for the first 5 years and more than 10.5 million ounces per
year for the life of the mine. Additionally, the mine is anticipated to produce ~80 tpa of indium
and ~15 tpa of gallium. The mine would also annually produce several million pounds of
byproduct lead, copper, and zinc, contributing to the overall profitability of the project. When
using the detailed cost assumptions contained within South American Silver’s preliminary
economic assessment, we estimate that Malku Khota could produce indium at approximately
$330/kg of refined metal (Armitage et al. 2011).
Despite the project being a potentially large supplier of indium in the future, South American
Silver is considering an alternative design that uses cyanide heap leaching instead of acid-heap
leaching. Under the cyanide heap leach option, the project would not recover indium but would
instead focus on silver extraction with byproduct gold and copper production.
Table 14. Operational and Production Summary of Malku Khota Silver-Indium Project
Source: Armitage et al. 2011; South American Silver Corp. 2012
40,000 tpd, recovery: 80% silver, 70% indium
Life of mine
200 million tonnes
5.6 mn lb
12.5 mn lb
Average annual production of recovered metal for the first 5 years. Figures do not vary significantly when examining life of
mine averages, except that silver production reduced by about one third and zinc production doubles.
Under the pricing
and grade assumptions used in Malku Khota’s economic model, a
comparison of the two cases shows that the indium, lead, zinc, and gallium contributions from
the acid leach process are significant and allow “for greater exploitation of the deposits; longer
mine life, higher metal production and higher [net present value]” (Armitage et al. 2011, p. 20).
As a result, the acid leach option (with indium recovery) is the preferred option while the
cyanide heap leach option is considered a fallback option in the event that the acid-chloride heap
leach option proves not to be viable.
The cyanide case will remain open for further study in
According to the indicative timeline provided in South American Silver’s preliminary
assessment in 2011, if the feasibility study supported investment and if all permits and licenses
were received, production at Malku Khota could begin as early as late 2015. The development
timeline and production estimates are complicated by Bolivian president Evo Morales’
nationalized South American Silver’s interest in the property in July 2012 (Fraser 2012). South
American Silver Corp. and the Bolivian government are currently involved in arbitration over the
property (South American Silver Corp. 2014) and the future of the project appears to be unclear.
Armitage et al. (2011) use base case pricing assumptions of $25/oz silver, $570/kg indium, $1/lb zinc and lead, $3.70/lb
Changes to the economics of the heap leach case could result from significant changes to the prices or grades of indium and