Andromeda Metals bags more offtake deals for Poochera halloysite-kaolin product

Andromeda Metals ASX ADN Halloysite-Kaolin Anpeak China offtake
Andromeda Metals now has offtake deals covering 307,000tpa of ore from Poochera.

Industrial mineral explorer Andromeda Metals (ASX: ADN) has now clinched more non-binding offtake deals, which, when combined, account for a further 207,000 tonnes per annum of the company’s dry-processed halloysite-kaolin product from Andromeda’s flagship Poochera project in South Australia.

During June, Andromeda representatives visited China and noted increasing interest in Poochera’s halloysite-kaolin ore.

Andromeda provided a number of Chinese users with product samples for testing.

As a result, Chinese-based speciality minerals company Anpeak China has inked a letter of intent for 120,000tpa of the material, while Weifang Engers Ceramics will take 50,000tpa, Guangzhou Changying Trade will purchase  30,000tpa, Guangzhou Jinghui Ceramic Material 5,000tpa, and Foshan Mei Zhi Hui Ceramic Material will secure 2,000tpa.

These latest non-binding offtake deals follow on from the company’s previously announced contract with China Mineral Processing Group, which will purchase 100,000tpa of Poochera product.

Andromeda stated the offtake deals were a “clear indication of the market demand” for its halloysite-kaolin ore.

According to Andromeda, the full expected offtake amount of 307,000tpa will underpin the scoping study.

Compared to the direct shipping ore option, the dry processed material has had 60% of the sand and moisture waste eliminated.

The dry offtake deals are in addition to Andromeda’s letter of intent agreements for 208,000tpa of wet processed product from Poochera, which Andromeda claims is a premium grade product for the ceramics industry.

“The rapid receipt of offtake letter of intents from a number of potential customers over a range of applications is very positive support for the strategy of using the low-cost dry-processing option to increase the value of the mineral and significantly reduce logistics costs, and clearly demonstrates a strong market demand,” Andromeda noted.

Poochera halloysite-kaolin project

Andromeda is earning a 75% stake in Poochera via a joint venture agreement with Minotaur Exploration (ASX: MEP).

Under the agreement, Andromeda is spending $6 million on advancing the project over five years.

A resource has been calculated of the project’s Carey’s Well deposit of 20Mt bright white kaolinised granite.

Within that resource is the 9.7Mt halloysite component which, in its pure form, can attract US$3,000 per tonne or more compared to kaolin which commands about A$300/t.

To generate early cashflow, Andromeda is looking to develop a direct shipping ore operation at the project, with a second stage expected to add value by providing end-users with a fully processed mineral.

In the longer-term, Andromeda is targeting the 99.99% high purity alumina market, which has been previously referred to as the real growth story of the lithium-ion battery and sustainable energy sectors due to its use in the batteries, LED and other advanced technologies.

Join Small Caps News

Get notified of the latest news, events and stock alerts