RENO, NV--(Marketwire - Nov 8, 2011) - Itronics Inc. (
Dear Shareholder:
We are writing this letter to provide an update on Itronics' business plan direction and vision for the future. This letter presents a summary of "what we have," "where we're at," and "where we are going." The Company is a "clean technology (cleantech)" fertilizer company that produces silver bullion as a byproduct. The Company's fertilizers are marketed under its proprietary GOLD'n GRO brand. The fertilizers are now well established and plans are being implemented to expand sales into other geographic regions of the United States. The Company's long term goal is to achieve profitable large scale clean technology driven sustainable growth in specialty fertilizers, mining chemicals, and specialty minerals. Sales in 2011 are expected to be about $3 million.
The Company has created revolutionary vertically integrated technology that provides reduced costs to its customers, completely converts a hazardous liquid waste stream (silver-bearing photographic liquids) to commercial goods (fertilizer and silver bullion) thereby contributing to long term material resource sustainability. The GOLD'n GRO fertilizers provide a number of agronomic and environmental benefits. They are more effective than fertilizers they replace, they contribute to increased crop production, they reduce the amount of fertilizer residuals in the soil, the risk of surface runoff into surface waters, and the risk of groundwater pollution. Our cleantech business model is structured to produce profits that are not constrained by regulatory control, thus providing open upside to Itronics' investors as the Company grows. As a "Clean Technology Company," we are an emerging leader in the markets in which we operate. The Company, its technologies, and its projects completely embrace the concept of creating and using clean technology to maximize long term sustainability. Profitably maximizing the use of material resources is a specific goal.
New technology development is an integral component in Itronics' implementation of its business plan to use internally developed environmentally green clean technology to produce solid profitable growth. Itronics, through the fertilizer division, is the inventor and operator of award winning recycling technology that converts spent photographic liquids into pure silver and award winning GOLD'n GRO fertilizers. Commercialization of this technology has created a "Green Consumer Option" for photo and x-ray processors and "Green fertilizers" for horticulture and agriculture. The fertilizers incorporate the "essence" of green because of how they are sourced and because of their excellent performance in the field.
Rapid technological changes are occurring in many industries and these changes are creating new growth opportunities. The fertilizer division is an example of one of these developments. A core skill set of the Company is its ability to create and implement new "award winning" metallurgical chemistry technologies in recycling, fertilizer manufacturing, and mining. The Company intends to continue to utilize and emphasize its technological skills in chemical metallurgy and to utilize advanced process and manufacturing technology as it expands its two business segments.
Itronics operates two divisions. One division, Itronics Metallurgical, Inc. (Fertilizer Division), is an emerging cleantech specialty fertilizer and silver refining business that now accounts for most of the Company's sales. The other division, Whitney & Whitney, Inc. (Minerals Division) provides administrative services to Itronics Inc. and its subsidiaries, manages research and development for the Fertilizer Division and historically provided technical consulting services to the mining industry. Today the Minerals Division is continuing to provide administrative and R & D services to Itronics and its subsidiaries. Now, instead of providing technical consulting services to the mining industry, it is transitioning to become a cleantech specialty minerals producer by helping its majority-owned subsidiary, Auric Gold & Minerals, Inc., acquire and develop a major polymetallic and multi-mineral Iron Oxide Copper Gold (IOCG) exploration project (Fulstone Project) in the Yerington Mining District near the northern Nevada community of Yerington, about 90 miles southeast of Reno, and by seeking to acquire specialty minerals operations.
On June 3, 2005, Itronics outlined its eight-part growth plan for the fertilizer division. Implementation of this plan is continuing, with adjustments being made as market conditions warrant. The fertilizer business has strengthened as the markets for the individual GOLD'n GRO fertilizers have been developed and as they are now being expanded. The Company's metallurgical technology development is continuing with the Stage 1 silver refinery expansion project that is underway. Meaningful operational cost savings in the refinery are being achieved. The new Itromet FeLix Process is operating successfully and creates additional expansion opportunities for the Company. The Company has identified certain specialty minerals that may have environmental benefits in mining, agriculture, horticulture, and animal husbandry and that may fit within the Company's cleantech business model. As time and funding permits, we are evaluating the feasibility of incorporating these minerals within the Company's business plan. A major objective of current business plan development activities is to identify and implement sales that are less seasonal in order to achieve more stable year round sales and cash flow. We believe that specialty minerals may provide opportunities to achieve this.
One of the most significant business plan adjustments since the fertilizer division business plan was published in 2005 is the shift in emphasis from rapidly expanding the fertilizer division by introducing the novel, environmentally friendly, GOLD'n GRO Guardian deer repellent into the up-scale urban home owner market, to developing an attractive IOCG project through the minerals division. This shift was made because the up-scale home owner market collapsed in the 2008-2009 time frame and funding could not be obtained to complete the United States Environmental Protection
Agency (EPA) registration requirements. This formerly attractive market is not expected to recover for several more years. During the same time period a renewed strong global market interest in gold, silver, and other metal commodities emerged. The minerals division, which has a long and successful history in helping mining companies develop new mines, owns intellectual property that provided the opportunity to enter this rapidly strengthening market. In the first half of 2009 the corporate decision was made to make the adjustment in direction. Today the Company is expanding its fertilizer division and intends to make strategic acquisitions to establish and expand sales in its minerals division.
The growth plan for the minerals division is to continue to expand and develop the Fulstone Project, and to seek out specialty minerals production acquisitions that are complementary to the development of the Fulstone Project, or to the fertilizer division growth plan, and that may be able to provide demonstrable environmental benefits. The Company believes that technology synergy between the two divisions is strong and that opportunities exist to strategically develop an integrated business model that includes fertilizers, mining chemicals, and specialty minerals. The fertilizer division is a clean technology driven business that has intellectual property as one of its strongest assets. The minerals division uses proprietary intellectual property to facilitate physical asset acquisition and development and new clean technology development. The minerals division is skilled at R & D, has a demonstrated ability to develop clean technology, and is skilled at identifying and integrating advanced mineral recovery technologies developed by others to achieve advanced clean technology goals.
Development of mineral projects by the Company makes it possible to capitalize on its intellectual property assets and technical expertise and to create the opportunity for potentially rapid increases in the value of those mineral property assets. The Auric Fulstone Project is classified as an IOCG (Iron Oxide Copper Gold) exploration target and is strategically located within the Yerington District. Some of the largest polymetallic copper gold deposits in the world are classified as IOCG deposits. These deposits often contain a variety of extractable metals and minerals including specialty minerals, uranium, and rare earths. The Yerington District hosts several nearby undeveloped copper-gold deposits that are partially drilled. One of these, which is about 20 miles from the Fulstone Project, is an IOCG deposit and now has a drill indicated resource approaching 1 billion tons. Another, which is about 5 miles away from the Fulstone Project, is a porphyry copper deposit with gold, silver, and molybdenum that has a drill measured resource of over 800 million tons. Both of these deposits would be characterized as "elephants" on a world scale. The Company believes that the Yerington District is one of the few locations in the world that hosts such a cluster of large undeveloped polymetallic copper-gold deposits. The Yerington District is globally attractive, not only because it is mineral rich, but because of its "politically safe" location with much infrastructure including rail service in place and a skilled work force readily available.
The Company believes that the Fulstone Project could contain up to 6 recoverable metals (iron, copper, gold, silver, molybdenum, zinc), and that there is potential for development and recovery of at least 3 specialty minerals (silica, clay, pyrophyllite). This project is very exciting because of potential large size, the potential for discovering recoverable metals and specialty minerals besides iron, copper, and gold, and the potential for application of advanced mineral recovery technologies to expand recoveries and reduce waste. At the Fulstone Project the Company anticipates that the project will achieve above average profitability by acquiring and integrating proven extractive technologies to maximize total mineral recoveries and thereby reduce the amount of waste rock and process tailings that are expensive to handle and that require investment in safe long term storage. As such, this will be an environmentally green clean technology mining project.
Company management believes that with its intellectual property foundation, its history of successfully creating and implementing award winning recycling technology that maximizes sustainability, and with new technology and project developments that are underway, Itronics is seriously undervalued. With about 4.1 million shares outstanding and a current share trading price of about $0.60 the market cap is approximately $2.4 million. Many early stage green technology companies trade at a premium to annual sales. Itronics is currently trading at a discount to its expected 2011 sales which are projected to be in the $3 million range.
During 2010 and 2011 the ability of small public companies to acquire funding to support operations and expansion has been severely constrained by changes in the regulatory environment and serious challenges in the financial markets in general. Itronics has dealt successfully with a number of financial challenges beginning in 2008 and continuing to the present time. Management intends to bring the Company's audits current and return to fully reporting status on the OTC BB as soon as funding permits.
The rate of growth and implementation of the business plan for both Divisions is dependent on raising additional capital. The Company had, until mid 2008, a relatively consistent, albeit expensive, source of capital. The recession in 2008 ended that source and the capital markets have still not fully recovered. In spite of this, the Company has made progress in implementing the business plan in ensuing years, but the growth rate has been slowed due to the lack of sufficient operating capital and a nearly complete lack of capital that could be used for growth purposes. The Company is actively working on raising the capital required to increase the rate of implementation of the business plan.
We would like to thank our shareholders for their on-going support. We are developing a strong cleantech business model and have a very positive vision for the future. Shareholders and potential investors who have questions regarding the Company, its growth prospects, and its financing should contact Bill Forkner, Itronics Director of Acquisitions & Finance or Shareholder Relations at 888-795-6336.
Sincerely,
Itronics Inc.
Dr. John W. Whitney, Chairman and President
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VISIT OUR WEB SITE: http://www.itronics.com
("Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains or may contain forward-looking statements such as statements regarding the Company's growth and profitability, growth strategy, liquidity and access to public markets, operating expense reduction, and trends in the industry in which the Company operates. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results, changes in risks, uncertainties or assumptions underlying or affecting such statements, or for prospective events that may have a retroactive effect.)
Contact Information:
Contact:
Bill Forkner
888-795-6336