Upper hand: Canada's only known vermiculite processing plant set to open in the North.

Hedman Resources Ltd. believes it has turned the corner in establishing itself as a world leader in the industrial minerals market.

Headquartered in Toronto, the company's announcements were coming fast and furious in the latter half of 2001 and the first three months of this year with releases on a merger, a new distribution deal, the introduction of new products and news on a vermiculite plant under construction in northeastern Ontario.

Building on some earlier successes with their existing lizardite mine and Superfil operations in Matheson, Claude Taillefer, company president and CEO, was calling recent events a "rebirth of the company."

The exploration and mining company produces an asbestos-free line of industrial mineral products for the global automotive market (for example, brakes and gaskets) and the plastics and building industries.

Hedman, in conjunction with Enviro Industrial Technologies, its recent New York-based investment and merger partner, was putting the finishing touches on a vermiculite processing plant at its mineral deposit in Butler Township about 40 kilometres northeast of North Bay.

The plant, a $2-million investment, will be the only known producer of this mineral in Canada. The facility is targeted for completion at the end of March, with the equipment expected to arrive in April.

With buyers lined up, it is expected to generate revenues of $3 million in the first 12 months of operation, producing 15,000 tons in the first year and doubling those numbers the next.

Vermiculite is used in a variety of ways, most commonly in the horticultural industry, appearing as fluffy flakes in bags of fertilizer, which trap the humidity in soil. It is also used by U.S. brake-lining companies and has applications as a fire retardant in the building industry due to its high heat resistance.

"There are about a half-million tonnes proven (in reserves), and we'll be doing more exploration," Taillefer says, noting the company is investing about $500,000 on an area program this year.

"It comes out as flakes in different grades, and we send it to customers with exfoliators that heat it up, and it pops like popcorn expanding it to 150 per cent of its original size, so if there's a fire it seals itself for corridor applications.

At present, vermiculite is imported to North America in vast quantities from South Africa and China.

"The agreement (with Enviro Industrial Technologies) brought with it a lot of synergies. Many brake-lining companies use vermiculite, and we're dealing with a U.S. company now that's testing both vermiculite and Superfil in their formula.

"This diversifies the company more into industrial minerals, and that's where we want to go because it's been neglected in North America for a couple of decades," says Taillefer, adding that raising money for these kinds of projects has not been an easy task.

In another deal struck earlier this year, Hedman signed an agreement with CGC Inc. (Canadian Gypsum Company) to be their distributor of Superfil. The vermiculite opportunity allows them to further expand their industrial-filler product line, the company says.

They operate a lizardite mine alongside an 80,000-square-foot processing facility located in Matheson about 85 kilometres east of Timmins.

Though lizardite deposits are numerous across the North, two years ago the exploration and mining company discovered what is believed to be the only known asbestos-free and non-toxic serpentine ore deposit in North America.

Since the 1960s Hedman had been processing lizardite ore until production ceased in 1996 when government legislation required there be less than one per cent asbestos in the finished product.

With about 10 million tons of asbestos-free ore in reserve, it is enough for a 50-year mine life, Taillefer adds. The $3-million plant employs 14 people manufacturing processed lizardite, which is branded as Superfil.

The specialty mineral is marketed as an environmentally safe, non-toxic, heat- and abrasion-resistant industrial substitute to asbestos and has better performance characteristics than other current asbestos-free substitutes.

Mined from an open pit, lizardite, a pale greenish-gray rock, is extracted in six- to eight-inch chunks and is pulverized and graded into an almost powder form for shipment to the eastern U.S. as Superfil 325,400 and 500.

The product has been accredited by the Standards Council of Canada and the New York Testing Laboratories.

In early March, Hedman introduced some new spinoff products with their new Superfil 100 and Superfil 200, the latest in a unique line of mineral-based filler products Hedman has been developing and producing for the automotive, plastics, friction and building-products industries. The company projects first-year sales at more than $2 million.

The two newest Superfil products are the outcome of some extensive research and development with ANCOS Inc., a Virginia company specializing in materials handling and polymer processing for the plastics industry.

It is being marketed as a high-quality alternative to other treated mineral and synthetic products currently used by the plastics manufacturing industry. Taillefer says Hedman is continually looking for new uses for its serpentine ore as part of the company's overall growth strategy, which includes looking for joint-venture partners and distributors worldwide.

www.hedmanlimited.com