COMMON QUESTIONS

There are companies in North America selling barium sulfate with grades as high as 99% BaSO4. How does this effect your pharmaceutical market product line?

They are not selling  barite that makes USP pharmaceutical grade. Currently there are no sales of USP barite in  North America. There are a few aspects to look at:

  1. Does their barite meet USP testing requirements? Are  they using USP testing methods on their barite or are they are running standard testing  which does not paint an  accurate picture of their grade down to the level of measurement that is required for human consumption. Most companies are using testing methods that are standard for oilfield and chemical/paint grade barite. By not using USP testing they can  not state their barite is pharmaceutical grade. The threshold for metals in USP barium sulfate is extremely low, 10ppm total metals. Most labs can not detect accurately below 10ppm and the barite must be  tested using  USP testing protocols from a Health Canada or FDA approved lab.
  2. Do they have a Health Canada or FDA approved  barite processing plant to produce pharmaceutical grade barite powder? You can not sell pharmaceutical grade barite without an approved GMP plant that undergoes Health Canada and FDA inspections. Voyageur plans on building the only GMP rated barite processing facility in North America after the PEA  is completed.

How do you compete with other barite providers who have precipitated barite that is 99% BaSO4?

  • We are not competing with other barite companies, we are not selling pharmaceutical barite powder, we are selling barium contrast suspension products. There is a big difference. By selling  contrast, we are selling our barite  at the  highest $/tonne price points  in the natural barium sulfate market. The following is hypothetical based on three standard formulas currently being sold into the USA market. The following is based on highly discounted prices:
    1. Low Density- 9 grams in bottle, CAD$3.17/9grams (CAD$352,222/tonne Barite)
    2. Medium Density- 150g in bottle, CAD$4.89/150g (CAD$32,600/tonne Barite)
    3. High Density- 320g in bottle, CAD$6.36/320g (CAD$19,875/tonne Barite)

Based on 50% JV revenue model, we would be selling our barite at a discount for the following prices:

  • LD Barite sales             CAD$176,111   per tonne.
  • MD Barite sales            CAD$16,300   per tonne.
  • HD Barite sales            CAD$9,939      per tonne.
(these numbers are hypothetical, upon completion of the PEA the economics will reflect actual sales and costs)

When will the company begin cash flowing?

VM cash flow strategy is to begin cash flowing upon receipt of Health Canada (HC) approval on our product lines. We  have  secured USP barium sulfate from a third party supplier. 2,000,000 grams has  been landed at the  Chief manufacturing plant. ImagingX will be able to commence production immediately after HC  approvals are completed. We will be using third party barite until the FC 10,000 tonne bulk sample is processed and delivered to the  Chief manufacturing plant. The time line for HC approvals is 3-4 months.

Why are other barite companies not selling contrast?

  1. The barite must be processed in a barite mill that falls under the GMP guidelines for USP barium sulfate production. VM will be building this plant and once it is built, VM believes that it  will be the  only Ba plant in North America that falls under the GMP guidelines.
  2. Barite companies in  the USA do not want a separate plant or to convert a plant for USP barite (the market is too small), they run 100% of all grades through their high  volume (100,000’s of tonnes per year) milling systems. The cost to clean out a system is too high if they wanted  to mill USP grade barite. They would also have  to build an acid wash plant for final finishing of the barite to meet USP biological protocols and lower their metal content below 10ppm.
  3. To manufacture Contrast requires an estimated USD$40-$60,000,000 investment into a pharmaceutical contrast manufacturing plant. VM has acquired our own plant via our joint venture with Chief. This was a significant deal from a CapX stand point for VM.
  4. Any company wanting to enter the contrast market requires consistent guaranteed pharmaceutical grade  barite from foreign suppliers. 100% of North American companies selling high purity barite are importing from foreign sources. The risk of relying on the  foreign  supplier to provide safe human consumable barite  is far too great to justify an investment for long term production. One bad shipment and  the  FDA or Health Canada will shut down the operation at a high cost to the producer. The  only way  to control the risk is to have your own source of barite. This is why the Frances Creek deposit is considered to be a very  valuable asset for VM and for any company in the barium contrast market.
  5. Supply for USP barite is extremely tight and only one company in China has FDA and Health Canada approval and has a certified GMP plant. That company is currently supplying Voyageur to start our project. There are many foreign companies claiming  to be able to sell USP grade barite, but based on our vetting process non have passed our due diligence process to date.

What is your strategy to grow your company?

We are building a barium contrast business that will compete with the major pharmaceutical companies operating in this market. Our model is using our rare deposit to become a low cost producer of barium  contrast. By using FC barite, ImagingX will have  the  lowest cost of ingredients in the barium contrast business.

In  the  future, we are planning on repeating this model on our Utah iodine/lithium wells. We believe that by owning and producing the source ingredient, iodine, will allow us to have  the lowest cost ingredients for the iodine  contrast market. After we develop our iodine  contrast product lines,  we will be  able to compete head to head with all of the big players in  the  contrast market, such as Bracco, Bayer, Guerbet and GE Pharmaceuticals. We will potentially have the lowest ingredient cost of barium and iodine for our products.

How big  is the  barium and iodine contrast market?

The combined market for both barium and iodine  is over US$4.57 billion and growing at 4.7% CAGR. Our long term objective is to take over 20% of this market.   (https://augustaobserver.com/2019/03/01/contrast-media-contrast-agents-market-research-2018-2023-analysis-of-key-players-potential-growth-share-demand-and-forecast/) .

How big is the market for barium contrast?

VM has received requests for supply of 1 micron and 10 micron FC barite from a large barium contrast producer. We understand  their market share worldwide. From this information we estimate the world market is in excess of 200,000,000 bottles per year.

Why is there a shortage of USP barite?

  • Pharmaceutical barite demand increases as the world population ages. Currently there is only one company we  are aware of in China producing FDA/Health Canada approved pharmaceutical grade barite. This company only allocates 5% of its production to the international markets, 95% is allocated to the Chinese market.

What is your competition?

  • The barium contrast market is currently dominated by one company, Bracco Pharmaceuticals. VM estimates they control 50% of the world market and 95% of the  North American market. In the USA there is one smaller barium contrast company named  Genus Medical Technologies. In Europe the largest company is  Guerbert pharmaceuticals.
corporate.bracco.com/gb-en/e-z-em-canada-inc   www.guerbet.com   www.genusmedical.com 

Why is barite important to the pharmaceutical sector?

  • Because it blocks radiation, it is  used in X-rays (looks opaque on X-ray film), CT and other diagnostic tests. Barium is used in medicine to diagnose gastrointestinal problems.

Why is Lithium & Iodine a good investment?

  • “The age of electrification across the transportation sector, the solar panel revolution, and Tesla’s battery gigafactory are igniting a battle for the cheapest battery. That will transform lithium into a boom-time mineral and the hottest commodity on the energy investor’s radar….” USA Today
  • Lithium is in a long term bull market. The main drivers to this demand cycle are electronics, electric storage systems and the new boom in electric vehicle production.
  • GigaFactories – Tesla building 3 more lithium ion battery factories, China building 7 currently with more planned in the future.
  • The demand for lithium ion batteries for EV’s is expected to increase seven fold within the next 7 years.
  • Iodine is used in Iodine contrast products. Our company ImagingX is planning on producing iodine contrast. By owning  our own wells and producing our own iodine concentrate will allow us to create a low cost iodine product  similar to  our barium contrast business plan.

In a few sentences, what sets you apart from your competitors?

  • Voyageur / ImagingX are building a pharmaceutical brand based on low costs and being the only contrast pharmaceutical company in the world that owns and controls its main  ingredient feed stock. By implementing this plan our company will be on trajectory to be one of the most highly  competitive companies in this market with high margin and  growth rates.

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