Andromeda Metals reports positive offtake meetings for Poochera halloysite-kaolin ore

Andromeda Metals ASX ADN halloysite-kaolin China Poochera Careys Well
A new major porcelain factory (pictured above) is due to open next year in China and wishes to lock-in long-term supply of Carey's Well ore.

Andromeda Metals (ASX: ADN) recently visited China to gather intelligence on the country’s halloysite-kaolin market and reported all parties it spoke to were “very keen” to lock-in supply from the Poochera project.

After a positive visit, Andromeda now plans to formalise the joint venture for Poochera, which it initiated in late April.

Under the joint venture, Andromeda can earn up to 75% of Poochera from Minotaur Exploration (ASX: MEP) by spending A$6 million on advancing the project over the next five years.

Andromeda can secure a 51% majority in the project within two years by investing A$3 million into progressing the asset.

Prior to Andromeda coming on board, Minotaur had previously executed letters of intent with eight Chinese porcelain manufacturing companies for more than 200,000 tonnes per annum of the halloysite-kaolin ore from the project’s Carey’s Well deposit.

During the China visit, Andromeda met again with these companies as well as many new ones.

According to Andromeda, the combination of China’s anti-pollution regulations, which has resulted in fewer operational mines, and mounting demand have led to tight halloysite-kaolin feedstock supplies.

Andromeda claims during its visit, Chinese porcelain producers voiced supply security concerns. Tight supply has also led to price hikes.

As a result, Andromeda believes Poochera, which is “uniquely high in halloysite” offers a viable supply source.

“The Carey’s Well halloysite-kaolin is seen as a very valuable and sought-after resource for the Chinese ceramic industry, along with other potential customers in many other the parts of the world market,” the company stated.

Carey’s Well

Prior to the joint venture, Minotaur had advanced Carey’s Well to scoping study stage with pilot plant trials revealing “one of the purest kaolin feedstocks” available.

Initial test work on the ore has indicated a 99.99% high-purity alumina is achievable and Andromeda has planned further testing and process flowsheet optimisation to reach this target.

Poochera includes three tenements and is 130km from Ceduna in South Australia.

Andromeda has begun examining existing drill samples to update the project’s resource and start a scoping study.

High purity alumina market

High purity alumina is critical to many new technologies including the lithium-ion battery, where manufacturers coat the cathode and anode electric separator sheets with high purity alumina, which affords additional fire resistance properties.

According to Persistence Market Research, the high purity alumina market was worth US$1 billion in 2016 and this number is expected to continue to experience annual double-digit growth.

In late afternoon trade, Andromeda’s share price was unchanged at A$0.007.

Join Small Caps News

Get notified of the latest news, events and stock alerts