Sulphur

• Raytec Metals Corp. (“Raytec”) recently acquired a 15 % interest in Sulphur Solutions Inc. (“SSI”)  
• SSI technology is aimed at providing a solution to an environmental liability for the gas/oil producer in an arena which is subject to greater and greater scrutiny.
• SSI provides an opportunity to produce a high value fertilizer product with strong economic returns   

SULPHUR SOLUTIONS 

Ownership 

Raytec acquired its 15% interest in SSI by making staged payments totaling $1.5-million upon SSI having achieved specific technical milestones.. The agreement with SSI further provides Raytec with a right of first refusal to participate in future SSI financings.  

Executive Summary   

SSI is an innovative technology company using proprietary processes to economically transform by-product sulphur streams from oil and gas production into high quality granular fertilizer, thus creating new markets for elemental sulphur.  SSI’s proprietary micronization and granulation technology, converts molten or solid (pure or off-spec) sulphur into a super-fine micronized sulphur material (<10 microns in size) for use in producing a high analysis, granular S fertilizer (0-0-0-90S) branded Rapid Release^TM. Rapid Release^TM is designed to be highly dispersible into an optimum particle size for effective time-release sulphate production throughout the season of application, a product attribute not presently available in the industry which will allow Rapid Release^TM to compete with ammonium sulphate. Competitive cost advantages in the acquisition of raw material and the processing production cycle will allow Rapid Release^TM to be sold at competitive prices with strong economic returns to SSI and the ultimate distributors of the product.   

Many gas producing areas in North America and throughout the world are suffering significant environmental and economic issues surrounding the accumulation of elemental sulphur as a by-product of their gas production activities. The demand for oil and gas continues to increase, yet the demand for sulphuric acid remains relatively stable and processing plant permitting is now dependent on a viable sulphur plan. There are approximately 15 million tonnes of sulphur stock-piled in western Canada and tens of millions of tonnes internationally.  With low elemental sulphur prices there is no economically effective method to deal with these stock-piles. Moreover, regulatory authorities and environmental groups are placing increased pressure and focus upon companies which harbour elemental sulphur creating a significant potential for liability to the corporation.

SSI intends to introduce multiple elemental sulphur processing plants for additional production of sulphur fertilizer. Strategies to execute include joint ventures, technology licensing arrangements, strategic alliances, debt and equity financing. The facilities will be portable and located at the site of sulphur production to take advantage of reduced operating costs associated with transporting the sulphur to an off-site processing facility and existing permits for sulphur storage and handling. Rapid Release^TM fertilizer will be sold to distributors and dealers for resale in North America and abroad to address general soil sulphur deficiencies and improve nutrient plant availability in calcareous and high pH agricultural soils.

In short, the commercialization of SSI’s technology aims to: 

• provide a solution to an environmental liability for the gas/oil producer in an arena which is subject to greater and greater scrutiny;    
• provide an opportunity to produce a high value fertilizer product with strong economic returns; and   
• allow farmers access to a high quality product at a price point which they are currently unable to enjoy, which could in turn help satisfy a growing worldwide need for food and fibre.