Andromeda Metals grows Carey’s Well contained kaolin by 59% in new resource

Andromeda Metals ASX ADN halloysite-kaolin resource Careys Well Poochera ceramics HPA China
Demand is on the rise within China’s ceramics industry for Andromeda Metals’ Poochera kaolin material, due to tight supply.

Andromeda Metals (ASX: ADN) has unveiled a 2012 JORC-compliant resource for the Carey’s Well kaolin-halloysite deposit within its flagship Poochera project in South Australia, with the updated resource possessing a 58.75% increase in contained kaolin compared to the historic estimate.

The new resource has growth from the JORC 2004 estimate of 16.3 million tonnes to 23.9Mt of bright white kaolinised granite.

This new measured, indicated and inferred resource is expected to yield 12.7Mt of minus 45-micron quality kaolin.

The resource replaces Minotaur Exploration’s (ASX: MEP) earlier calculations that were reported in 2009 and 2012, with the 16.3Mt estimate from 2012 anticipated to yield 8Mt of minus 45-micron kaolin.

Andromeda managing director James Marsh told Small Caps that kaolin resources are different to typical estimates for other minerals like gold or nickel, which are based on grade or percentage per tonne.

“In this resource, the classification is based on the physical property of brightness for the kaolin,” Mr Marsh explained.

“The upgrading of the resource is the first step in progressing the Poochera joint venture.”

Mr Marsh said the next steps will involve securing permits to carry out bulk sampling of the halloysite-rich kaolin, as well as developing a halloysite resource and undertaking feasibility studies.

“Preparation for the bulk testing is well underway,” he said.

Once the samples have been collected they will be sent to plants in China and Australia for full-scale processing trials.

Additionally, Andromeda is looking at refining the halloysite-kaolin further to produce high purity alumina (HPA) for the surging LED and lithium-ion battery sectors.

Results from metallurgical test work into producing a 99.99% HPA are anticipated either later this month or early September.

Andromeda is also collaborating with the University of Newcastle on developing further uses for the deposit’s halloysite material including pharmaceuticals and lithium batteries.

Poochera halloysite-kaolin project

Andromeda executed an agreement with Minotaur earlier this year to earn up to 75% of Poochera, which comprises three tenement and is about 130km from Ceduna.

Under the deal, Andromeda will spend A$6 million over five years to lock-in the 75% interest.

Halloysite-kaolin market

According to Mr Marsh, the demand for halloysite-kaolin in China has “risen significantly” due the Chinese Government shutting down domestic mines.

With the most of global production arising out of China, this has led to constrained supply and pushed the price up.

Andromeda representatives visited China in June to get a better understanding of the country’s halloysite-kaolin market.

The company reported the parties its spoke to were “very keen” to secure supply from Poochera.

Additionally, Minotaur’s previous marketing confirmed Carey’s Well material was suitable for paint, paper, ceramics, plastic, rubber, environmental and pharmaceutical industries.

Andromeda topped up its cash late last month after completing an oversubscribed share placement to raise A$1.1 million before costs.

“The recent capital raising undertaken by Andromeda (PAC Lead Manager) has put us in a strong position, with growing Chinese demand for the Poochera-type halloysite-rich kaolin driving up the price,” Mr Marsh said.

By late morning trade, Andromeda’s share price was steady at A$0.006.

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