Andromeda Metals unveils three more offtake LoIs for Poochera halloysite-kaolin ore

Andromeda Metals has secured direct shipping ore offtake agreements for 405,00tpa of Poochera halloysite-kaolin material.
Andromeda Metals (ASX: ADN) has secured yet another suite of offtake letter of intent (LoI) agreements totalling 405,000 tonnes per annum for its proposed halloysite-kaolin material from the Poochera project in South Australia.
Under a non-binding letter of intent, Longyan Kaolin China will take 200,000tpa of direct shipping ore halloysite-kaolin from Poochera for use in the ceramics sector.
A further non-binding LoI was inked with one of China’s largest kaolin producers Beihai Kaolin, which will also purchase 200,000tpa of DSO Poochera ore.
Andromeda’s third offtake LoI is with Japan-based Yamada Toshio Shoten, which will purchase 5,000tpa of DSO.
All three parties have confirmed they will pay between $115-$140 per tonne cost insurance and freight (CIF).
“Confirmation of the very significant market demand for this rare and high-value form of kaolin from our extensive resources located in South Australia provides Andromeda with the potential to become one of the world’s largest producers of halloysite-kaolin material, which is a very exciting position to be in,” Andromeda managing director James Marsh said.
The latest agreements are a result of Andromeda’s marketing initiatives and will be incorporated into a scoping study that is due for completion by the end of next month.
Previous offtake deals
Today’s announcement follows Andromeda securing offtake agreements for 307,000tpa of dry-processed halloysite-kaolin from Poochera, which were revealed last month.
Andromeda provided a number of Chinese end-users with Poochera dry-processed ore samples, which resulted in various non-binding agreements with: Anpeak (120,000tpa), Weifang Engers Ceramics (50,000tpa), Guangzhou Changying Trade (30,000tpa), Guangzhou Jinghui Ceramic Material (5,000tpa), and Foshan Mei Zhi Hui Ceramic Material (2,000tpa).
Earlier in July, China Mineral Processing Group also said it would purchase 100,000tpa of dry-processed Poochera ore.
Meanwhile, last year, Andromeda noted that it had received interest from potential parties to purchase up to 208,000tpa of wet-processed ore.
Andromeda’s current scoping study is evaluating the project’s “optimum operational strategy”.
“The significant logistical advantages of selling the dry-processed material (approximately 60% less waste) will be compared with the DSO option that would provide an immediate receipt of revenues and have minimal capital expenditure requirements,” the company stated.
Andromeda is also investigating capturing maximum value by wet-processing the ore in a secondary location to produce a “world-class premium product”.
Poochera halloysite-kaolin project
Located in South Australia’s Eyre Peninsula, Poochera hosts the Carey’s Well deposit which has a resource of 20Mt bright white kaolinised granite, including 9.7Mt of halloysite ore.
Andromeda is earning a 75% interest in the asset by spending $6 million on exploration and development over five years.
Investors reacted positively to today’s offtake news pushing Andromeda’s share price up 30% to $0.065 by mid-morning.