Argex Targets Lowest Cost Titanium Production

In an industry often characterized by an excess of caution, the pursuit of modest goals, and cookie cutter companies that are virtually indistinguishable from one another, Argex Mining Inc. (TSX-V:RGX) (FXE: ASV) (OTCBB: ARGEF) is already a stand-out. Argex comes as close as is possible to Canada's "pure-play" titanium stock, and with the economy in growth mode again, demand for the world's toughest metal is on the rise.

Argex's goal is as clear as it is daring: to turn its 100% owned La Blache Titanium–rich polymetallic deposit into the world's lowest cost source of titanium dioxide (TiO2).

Titanium Uses Titanium occurs primarily in the minerals anatase, brookite, ilmenite, leucoxene, perovskite, rutile, and sphene. Of these minerals, only ilmenite, leucoxene, and rutile have significant economic importance. As a metal, titanium is well known for corrosion resistance and for its high strength-to-weight ratio.

Approximately 95% of titanium is consumed in the form of titanium dioxide (TiO2), a white pigment in paints, paper, and plastics. TiO2 pigment is characterized by its purity, refractive index, particle size, and surface properties. To develop optimum pigment properties, the particle size is controlled within the range of about 0.2 to 0.4 micrometer. The superiority of TiO2 as a white pigment is due mainly to its high refractive index and resulting light-scattering ability, which impart excellent hiding power and brightness.

The value of titanium mineral concentrates consumed in the United States in 2009 was about $460 million. Zircon was a co-product of mining from ilmenite and rutile deposits. About 94% of titanium mineral concentrates was consumed by domestic titanium dioxide (TiO2) pigment producers. The remaining 6% was used in welding rod coatings and for manufacturing carbides, chemicals, and metal.

Because it is biocompatible (non-toxic and is not rejected by the body), titanium is used in a gamut of medical applications including surgical implements and implants, such as hip balls and sockets (joint replacement) that can stay in place for up to 20 years. The titanium is often alloyed with about 4% aluminium[69] or 6% Al and 4% vanadium.

The La Blache Deposit
Argex recently made the transition from a CPC (Capital Pool Company) to a mining company. The La Blache deposit hosts a significant historical high grade titanium deposit and is located in the world's number one ranked mining district of Quebec. The property has a historic resource grading 20.5% Titanium Dioxide, 48% Fe, 0.36% Vanadium.

Argex began a 13,000 meter drill program at La Blache February 12, 2010 and have already received excellent results from the first 6,000 meters, and has just received very positive results from metallurgical tests performed by Process Research Ortech on the property.

Speaking of these initial results Argex President and CEO Michael Dehn enthused:

"We are extremely excited with the metallurgical results received to date and the pace and professionalism exhibited by Process Research Ortech. We expect to have the initial metallurgical test work with Process Research Ortech completed on schedule. Results to date have exceeded our expectations and will demonstrate that La Blache is truly a world class titanium-iron-vanadium deposit".

Argex is not, however, resting on the laurels of these early results and are pushing forward with continued drilling at La Blache to significantly increase the historic 78 million tonne resource of and put it into a 43-101 compliant category.

The company has all the pieces in place to maximize the potential of these exciting first results and to turn Argex into a titanium-producing powerhouse. It's one thing to have a hot property in a stable mining friendly jurisdiction with historical resources, but if you don't have the team, the technology and the expertise to bring the property online it is all for naught.

Argex has assembled a world class team of highly accomplished metallurgists who have put their considerable skills and experience toward the development of a proprietary metallurgical process. The goal is production of the full spectrum of high grade final products and the company fully expects to become the lowest cost titanium and vanadium producer in Canada and the eventually the world.

Production Plans at La Blache
La Blache is a near-surface, deposit that the company thinks will prove amenable to open pit mining. The deposit could potentially go down to 40 meters or more which would double the historic tonnage and could result in several decades of open pit mine production.

True to their belief in matching a promising property with leading-edge technology, Argex is building a small-scale pilot processing facility which they hope to have completed by the end of 2010. The facility is designed to profile their proprietary metallurgical technology and launch La Blache toward the full-scale production and commercialization of the deposit.

A NI 43-101 resource estimate for La Balche has been commissioned and the team looks forward to even more positive results. Argex believes that with the combination of its proprietary metallurgical process and La Blache's undeniable resource potential the property will become the highest grading titanium deposit mined on the planet once it is in full operation.

Initial Positive Metallurgical Test Results
On July 20th Argex reported that it had received results from metallurgical tests performed by Process Research Ortech on recently obtained samples that indicate a significant high quality concentrate.

Preliminary leaching tests using Process Research Ortech's leaching technology demonstrated high extraction efficiencies for the iron (>90%), titanium (>85%), vanadium (>90%) and chromium (>90%). Further test-work is being conducted to optimize the extraction of iron and titanium.

In the tests recently completed, Process Research Ortech made two composite samples from drill core samples that Argex had previously analyzed with ALS Chemex. The two composites (of approximately 100 kg each) were made from samples containing the lowest amount of iron (approximately 41% Fe expected) and the highest amount of iron (approximately 47% Fe expected). Initial test work has concentrated on the processing of the high iron composite. Below is the head analysis of the high iron composites.

*calculatedGrind size and screen analysis were performed after various grind times. Subsequently, various physical separation methods (flotation, gravity, and magnetic separation) were applied for pre-concentration of the ore.

Encouraged by these early results Michael Dehn stated "Enrichment of samples by magnetic separation appears to have been very successful as the upgraded samples are indicative of effective elimination of the waste rock and impurities," Dehn continued saying "This can be expected to mean reduced plant tonnage throughput and overall cost savings for the metallurgical process."

Magnetic separation results show that iron, vanadium and chromium are enriched in the magnetic fractions and depleted from the non-magnetic fractions. Results from the gravity separation using spiral tests show that iron and titanium are evenly distributed among the spiral fractions. Results also demonstrate a slight enrichment of vanadium and chromium in the spiral concentrates. Magnetic separation on the spiral fractions showed that iron, vanadium and chromium are enriched in the magnetic fraction. There also appears to be a slight enrichment of titanium in the non-magnetic fractions.

Speaking with confidence about the future for Argex Michael Dehn added;

"Additional work is planned to include a closed loop system to recycle hydrochloric acid in the process, we expect this to be a very energy efficient, cost effective and environmentally friendly process."

Next Steps: Scoping Study at La Blache
On June 17, 2010 Argex announced that the Company has hired Groupe BBA Inc., widely regarded as one Canada's leading companies of mining and metals focused independent engineering professionals, to aid the company in its preparations for the scoping study on La Blache scheduled for completion by year-end 2010. The scoping study will include an economic analysis of the mineral resources and should incorporate forecasts of mine production rates, capital costs to develop and sustain the mining operation, operating costs, and projected cash flows prior to the completion of a preliminary feasibility study.

Titanium Supply and Demand Outlook
Titanium demand is likely to rise sharply (up to 50%) by 2015, according to Titanium Market Review 2010 published recently by Market Publishers Ltd. . Titanium supply overhang from the previous downturn will remain "in place" at least through 2011. Current Titanium mill utilization rates are not expected to rise above 80 percent until 2013 – 2014.

However, it is predicted that the combination of demand growth and supply constraints will create a supply deficit starting with 2012 equivalent to 20% of world supply by 2015 in the absence of new project development. Major Titanium suppliers (Rio, Iluka and Exxaro) are all facing challenges in maintaining or growing their current production levels.

Fortune Favors The Bold
As China, India and the rest of the developing world race to catch up to the developed world and provide their citizens with the infrastructure and cutting edge technologies required to succeed in the new economy, their appetite for construction materials will not abate in the foreseeable future. Titanium and Vandium will play an absolutely essential role in the building of these young economies which having come of age in a brave new world of technological advancements will require vast amounts of the building block metals that form the base of advanced construction and technology.

It's not often that a young exploration company like Argex set such lofty goals and even more rare for such a young company to posses the tools to achieve these goals. Setting out to claim 30% of the exploding Titanium market may seem like hubris to some but fortune favors the bold and bold (and risk-tolerant) investors will allay themselves with this ambitious company and help them build the world of the future. With a truly convincing package of deep expertise, innovative technologies, a killer property and the will to succeed it would be unwise to bet against them.

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