Emerging exploration company Metalsearch (ASX: MSE) has entered into a binding agreement for the acquisition of Abercorn Kaolin Pty Ltd, which owns the large-scale Cynthia kaolinite discovery in central Queensland earmarked for development into a high purity alumina and commercial-grade aluminium sulphate project.
The acquisition process will commence with payment of a $50,000 non-refundable deposit by Metalsearch to Abercorn, followed by a combination of cash and Metalsearch shares including deferred payments to Abercorn once key performance-related milestones have been achieved.
As a condition to completion of the acquisition, Metalsearch must conduct a $2 million capital raising to fund exploration work and a scoping study based on an open pit mine and onsite processing plant to produce HPA and aluminium sulphate and facilitate potential direct shipping ore opportunities.
Situated 135 kilometres south of Gladstone and 125km west of Bundaberg, Cynthia is made up of three contiguous Exploration Permits Mineral (EPMs) comprising 38 sub-blocks over 128 square kilometres.
While the scale of the deposit has not yet been quantified, Metalsearch said an earlier campaign of 24 reverse circulation drillholes had intersected kaolinite, with the average intersection being approximately 30 metres.
The vertical extent of the kaolin as shown by drilling is between 3m and 35m thickness, with little to no overburden averaging 1.5m in thickness.
The mineralisation remains open in all directions, indicating the potential for a very large, high-grade orebody with the capacity to produce HPA and marketable volumes of higher-grade feedstock.
Metalsearch plans to conduct an extensional drilling campaign to further define the size and scale of the orebody and produce a JORC-compliant mineral resource.
HPA is a very pure form of aluminium oxide and a precursor material required for the manufacture high-tech products such as smartphones, tablets, televisions, watches, optical lenses and bio-medical devices.
It is a critical input – which cannot be substituted – in the production of scratch-resistant synthetic sapphire glass.
The fastest growing market for HPA is electric vehicles, where the material is used as a coating on lithium-ion battery separators to ensure their safety, integrity and performance.
HPA-coated separators reduce battery flammability and increase thermal stability as they can tolerate much higher temperatures (greater than 200o Celsius) than traditional separators.
They have also been shown to significantly lengthen battery life due to lower self-discharge and increased battery discharge rates.
Aluminium sulphate is widely used as a coagulating agent in the purification of drinking water and waste water treatment plants.
In water purification, it causes suspended impurities to coagulate into larger particles which can settle to the bottom of a container (or be filtered out) more easily.
Reports predict demand for HPA is set to escalate and outstrip production due to forecast increases in global electric vehicle adoption, while demand for aluminium sulphate is expected to grow in line with global demand for cost-effective water purification solutions.
At midday, shares in Metalsearch were up 57.14% to $0.011.