FYI Resources enhances Cadoux Kaolin’s viability after achieving 99.999% purity alumina

FYI Resources ASX high purity alumina HPA 99999 grade recovery
High purity alumina recovery grading 99.999% has the potential to enhance the overall economics of FYI Resources' flagship project.

FYI Resources (ASX: FYI) has successfully produced outstanding grade recovery of 99.999% purity alumina during ongoing product development and test work for its flagship Cadoux Kaolin project in Western Australia.

The product was produced via the company’s standard process flowsheet, with the product grade independently analysed and verified by Ultra Trace in Perth.

FYI said the test work was designed to provide data and information from the process flowsheet results of the laboratory-based test work as a “replication” of the full-scale process design.

The Perth-headquartered company expressed confidence in the grade recovery, which it believes underpins potential for positive improvements to the project’s economic case.

“Achieving 99.999% or 5N high purity alumina (HPA) is an extremely encouraging result,” FYI managing director Roland Hill said.

“Not only is it an incredible outcome to attain this level of purity, it also has a potentially profound impact on the overall project economics.”

A pre-feasibility study for Cadoux Kaolin was completed last September, indicating the project could produce up to 8,000 tonnes per annum of high purity alumina to deliver a net present value of US$506 million over a 25-year period.

The continued test work will help shape the projects bankable feasibility study (BFS).

To support the ongoing BFS and to further de-risk the process flowsheet, FYI is constructing a pilot plant.

The pilot plant is aimed at increasing confidence and certainty on the engineered flowsheet design and operational performance of the process circuit before FYI commits to full-scale commercial production.

The BFS is scheduled to be completed by mid-2019 with construction planned to kick off in the December quarter of 2019, subject to securing suitable offtake agreements and project funding.

HPA market tipped to grow

99.999% alumina, also known as 5N HPA, is moderate in size compared to the 4N market, but is forecast to grow.

4N HPA is a high‐value product that has many broad traditional applications and is increasingly becoming a critical component in the electric vehicle, battery and power storage markets.

5N is a sub-set of the HPA sector with smaller market applications that are generally tailor-made to the special requirements of each customer. However, 5N attracts a significant premium in pricing over 4N due to its use in very complex applications, including aerospace and defence.

Recent estimates by Allied Market Research tipped 4N HPA product to sell in a range from US$30,000-$35,000 a tonne in 2018/19 versus over US$50,000/t for 5N.

“We believe the ability to generate such a ultra-high purity product continues to demonstrate the Cadoux Kaolin Project is world-class potential and we look forward to progressing discussions with possible end use customers,” Mr Hill said.

FYI shares jumped 20% in late morning trade to $0.066.

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