Junior gold, lithium and copper explorer Andromeda Metals (ASX: ADN) is making a bee-line for high-grade aluminium via a joint-venture farm-in deal with Minotaur Exploration (ASX: MEP).
The two companies have agreed for Andromeda to acquire up to 75% of the halloysite-high purity alumina (HPA) project in South Australia with the important condition that it will spend A$6 million on developing the project over the next 5 years.
The two companies have said they have proposed a mutually agreeable development path that will allow for “early mining approvals” and “start-up mining operations within two to three years”.
The JV deal also includes the services of Minotaur’s James Marsh who will become Andromeda’s new managing director as part of the deal, having served as a lead developer of a range of “white-bright” kaolin products during his time at Minotaur.
According to Andromeda, he is “ideally suited to advance Minotaur’s kaolin clay and nanoclay assets to commercialisation.”
The joint venture’s primary focus will be on the Poochera Kaolin-Halloysite Project on the Eyre Peninsula which is comprised of 3 tenements, located 635 kilometres from Adelaide and 130 kilometres from Ceduna.
The project is confirmed to contain a high-quality kaolin (including halloysite) JORC mineral resource, with significant potential to manufacture HPA at grades beyond 99.9%.
Bright lights of alumina
High purity alumina (HPA) is effectively a high purity non-metallurgical alumina product with an alumina grade exceeding 99.9%. In other words, the highest purity of aluminium oxide possible with improving processing methods potentially capable of delivering grades of 99.999%.
HPA’s properties include low friction and high wear-resistance, hardness, thermal and electrical insulating ability, noncorrosive and broad chemical compatibility which means it has significant applications amongst the growing array of high-tech products that are being sold to both consumers and manufacturers of other products.
HPA has been touted as a “new age feedstock commodity” that’s critical to the supply chain of many high-tech products including lithium-ion batteries and their associated manufacturing process within the broader energy storage sector that has garnered widespread attention in recent years.
Other associated products such as LED lighting and sapphire glass manufacturing (used in the production of smartphones and TV screens) are also considered to be a key market for HPA suppliers.
The raw material is experiencing dramatic growth due to its application in the manufacture of today’s high performance electronic devices and electric-powered vehicles with the underlying market forecast to grow at more than 20% per year over coming decade as many countries attempt to undergo rapid mechanisation domestically and consumers look to high-performance products on a global scale.
In addition to HPA, Andromeda said that its newly-acquired project stake also contains halloysite — a rare nanoclay derivative of kaolin with a nanotube structure. Halloysite has strengthening applications in the ceramics and cement industries and presents “niche market opportunities in the nanotechnology sector”.
According to both Andromeda and Minotaur, indicative non-binding offtake agreements have been arranged with Asian ceramic manufacturers providing “confidence and opportunity” for rapid development of the project moving forward.
“Completion of the transaction provides Andromeda with access to an advanced project potentially capable of being advanced rapidly through feasibility to a development decision within 2-3 years,” according to Andromeda.
Extensive test work has been completed by Minotaur on its Carey’s Well deposit, including resource drilling, bulk sampling, pilot test plant trials and marketing for ceramics and other conventional applications.
The companies consider their JV project to be ready for mining lease application as part of feasibility studies that require additional funding. Andromeda’s farm-in to the deal means the project can be moved forward and commercialised without additional capital raisings in the short-term.
Minotaur has already undertaken some preliminary research into innovative uses of halloysite nanotubes as strengthening additive for proppants, concrete and other nanotubular uses.
“The directors of Andromeda Metals are excited to see the Company enter this newly emerging high growth sector of HPA and the associated application halloysite offers to new age technology advancements. We are delighted to have secured the services of James Marsh to lead the development of the project going forward,” said Mr Rhod Grivas, chairman of Andromeda Metals.