Stans Energy Corp. Acquires Past-Producing Heavy Rare Earth Processing Facility and Rail Terminal

January 13, 2011 (Source: Usetdas) — Stans Energy Corp. (RUU – TSX Venture), (‘Stans’ or the ‘Company’) has reached an exclusive agreement with the majority owners of the Kyrgyz Chemical Metallurgical Plant (KCMP) (See Feb. 8, 2010 press release for option agreement details), to purchase 100% of  KCMP’s Rare Earth (RE) processing complex, including a private rail terminal, for a total of $5,500,000 USD.  The exclusive agreement is subject to a legal due diligence period and TSX Venture Exchange approval.  

For almost three decades this facility produced 80% of the former Soviet Union’s RE products.  The RE processing complex and the rail terminal were used to produce and transport materials, equipment, chemicals and final product to and from markets when the Kutessay II RE mine was last in production.  The Kutessay II mine is now 100% owned by Stans Energy.  At that time the processing facilities comprised of four individual plants that were part of a much larger industrial complex.

Historical Production Flow Sheet

Plant 1

Much of the past technology used in Plant 1 would not be used today, as newer Sorption technology has proved to be more efficient and less damaging to the environment when removing radioactive materials.  Plant 1 has been decommissioned and will not be used in Stans’ new design.  

Historically, RE feed from the Kutessay II mine was brought to Plant 1 to be refined into a new, higher grade concentrate.  At this stage, the radioactivity was removed through roasting.   Modern technologies have made this step redundant.

Plant 2

Plant 2 separated the mixed rare earth solution from Plant 1 and produced light rare earth (LRE) concentrate (La, Ce, Pr, Nd), middle rare earth (MRE) concentrate (Sm, Eu, Gd), heavy rare earth (HRE) concentrate (Tb, Dy, Ho, Er, Tm, Yb, Lu) and Yttrium Oxide.  The equipment in Plant 2 is intact, but has been removed from the building and stored at a location 4 km away for security purposes.  Stans intends to refurbish and reassemble Plant 2.

Plant 3

Plant 3 separated the MRE and HRE concentrates into final oxides, metals and alloys.  This Plant was where the various complexing, elutriation, and regeneration solutions were prepared.  The process was carried out on a batch system where the conditions in the ion exchange columns (linear flow, solution, complexing, elutriating solution concentration solution, etc.) were specific for each REE.  The Rare Earths were then precipitated as the oxalate (carbonate), filtered and washed and then dried and calcined to rare earth oxide (REO).  The RE metal section involved the production of metals from the REOs through various electrical, induction and arc furnaces.

The Soviets never used Plant 3 to its full capacity as uses for HREEs were limited between 1965 and 1990.  In the late 80s, the Soviets initiated plans for the Plant’s expansion to process 3-4 times the amount at which it was operating.  The industrial building expansion was completed when the Plant stopped operating in 1991, and some new equipment is on site but not installed.  

The Plant continued to process remaining small amounts of HRE concentrate into final metals up until 2009.  The last of its HREE concentrate and final products were sold in 2010.  Plant 3 is in good working condition.

Plant 4

Plant 4 separated light rare earth concentrate from Plant 2 into individual rare earth oxides.  Like Plant 2, much of the equipment from Plant 4 was removed and stored at a secure location.  A feasibility study will determine whether Stans Energy sells light rare earth concentrate derived from Plant 2, or reassembles Plant 4 to produce final oxides.

Rail Terminal

The newly purchased rail terminal connects to the Central Asian Rail Network, which connects to Russia and all countries in Asia including China, Korea, and by ferry to Japan. The purchase of the Rail Terminal includes a gantry crane, two warehouses, two offices, and a weigh station. The land purchased with the rail terminal amounts to 143,500 m2.  The rail terminal is roughly 15 km from the KMCP Processing Plants by paved road, and is roughly 35 km away from the Kutessay II mine by paved road.

Equipment Inventory and Industrial Space

In an independent assessment of the equipment, it was determined that 97% of the equipment purchased that was previously used for processing rare earths were in either good, or satisfactory operating condition, and only 3% required repair.  Stans is currently compiling and translating a full list of the inventory included in the purchase to be posted to its website at a later date.  The total industrial space in Plants 2 and 3 is 21,812 m2.

Capacity Old & New

Previously, the entire plant operated at approximately 500 mt/annum of final rare earth product.  During its time in operation, its capacity varied depending on which products were needed and at what purities.   120 different final rare earth products were produced, including oxides, metals and alloys of all lanthanides with purities up to 99.99%.  In the late 80s, the Soviets initiated plans to expand the operating capacity to 1500 mt, but never finished the expansion.  Stans Energy will provide its estimates to expand the capacity of the processing complex at a later date.  A feasibility study will commence shortly to determine the optimal scale at which to bring Kutessay II back into production.

Upon the completion of the transaction, Stans Energy will engage the Russian Institutes that designed and built KCMP to help redesign and refurbish the Facilities to create a new, efficient rare earth supply source.  New technologies and solvents that were unavailable during the Soviet era will be tested in an effort to improve the Plant’s efficiency.  

Stans Energy is currently in discussions with interested parties related to financing the purchase of the RE processing complex and other business initiatives.

Robert Mackay, President and CEO, stated, “The acquisition of the KCMP RE Processing Plants and Rail Terminal is the culmination of many months of hard work and due diligence by Stans Energy and a variety of consulting parties.  Owning a processing facility is the next significant step in the implementation of our business plan to become a major developer and producer of HREEs. It is my hope that restarting this facility will help to reestablish the once vibrant community in the town of Orlovka, where KCMP is located.”

This release may contain “forward-looking statements” within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this document. The Company disclaims any intention or obligation to update or revise any oral or written forward-looking information and statements whether as a result of new information, future events or otherwise, except as required by applicable law. Accordingly, readers should not place undue reliance on forward looking statements.

The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe”, and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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