TORONTO (miningweekly.com) – Montreal-based MDN Inc believes it can be producing niobium and tantalum from its Quebec project by 2012, exploration vice-president Marc Boisvert said in Toronto on Friday.

There is a scoping study under way at the moment, which will be completed and made public by November, he said at an event hosted by MineAfrica.

After that, a decision will likely be made to begin a feasibility study, in order to be in a position to start up in 2012.

MDN has working capital of $25-million and a steady source of cash, thanks to its 30% holding in Barrick Gold's Tulawaka mine in Tanzania.

Boisvert reiterated that the foray into niobium does not change the firm's focus on gold.

Rather, the cash flow generated from the niobium asset will be redirected into MDN's hunt for a big “company maker” gold discovery in Tanzania and Quebec.

MDN has secured an option to buy a controlling interest in privately-held Les Minéraux Crevier (MCI), which owns the niobium/tantalum resource.

If it exercises the option in full, MDN will spend C$13,5-million to buy 75% of MCI in two stages, redeem an MCI convertible debenture and complete the necessary preproduction and feasibility studies on the project.

MCI is currently 50%-owned by Toronto-based Iamgold, which has a ferroniobium operation, Niobec, about 190 km away.

The asset was snapped up at a discount at the end of last year, and the company hopes to be able to add a lot of value through the feasibility process and then reap the rewards once production starts, Boisvert said.

Niobium and tantalum are both considered strategic metals by a number of governments, including the US, and demand for both metals is forecast to grow by around 5% a year for the foreseeable future.

Niobium is used in speciality high-strength steels, while tantalum is essential to most electronic devices, because of its distinction as the metal with the highest known specific capacitance, or ability to hold and instantaneously release an electrical charge.