Andromeda Metals confirms robust economics in DFS for "globally significant" Great White Kaolin Project

Andromeda Metals Ltd (ASX:ADN) is working towards delivering a definitive feasibility study (DFS) for its Great White Kaolin Project joint venture with Minotaur Exploration Ltd (ASX:MEP) on South Australia’s Eyre Peninsula this month.

The company recently commenced a 2,500 metre aircore drilling program at the Great White deposit with the aim to provide additional material for ongoing testing and to better define the high purity kaolin (non-halloysite type) Ultra Bright Domain of the deposit.

Testing to date has shown that the Ultra Bright Domain, which consists of extremely high purity kaolinite with ultra-high brightness and with low halloysite levels and extremely low iron oxide, is ideally suited to high-value markets in specialist coatings and polymer.

Proven premium HPA feedstock

In February 2019, Andromeda received results from a third round of enhanced HPA metallurgical test-work of halloysite-kaolin from the Great White Project after testing had shown that 4N purity could be achieved with only one stage of purification - confirming it to be a truly world-class feed material for HPA production.

Round one preliminary testing had already achieved a purity of 99.9855% from an over-refined sample where impurities had been introduced and a second round of testing used a more suitable halloysite-kaolin sample and gave an Al2O3 purity of 99.9946% with only a single stage of purification.

The third round of testing was undertaken to confirm that the single-stage purification result was repeatable and to also determine if even higher levels of purity were possible.

Results confirmed that producing 4N HPA from a single-stage purification process is fully achievable and repeatable when using the high-purity halloysite-kaolin as a feed.

Offtake and market opportunities

HPA is used primarily to make LED lighting and increasingly ceramic coated separators (CCS), a key component of Electric Vehicle Lithium-Ion Battery (EV-LIB) cells.

The LED industry is the primary driving force behind 4N+ HPA demand – where demand is growing at a 19.8% CAGR (2020-28) from a high base – with demand for CCS growing at a higher 24.5% CAGR, but from a much smaller base.

Overall, 4N+ HPA annual demand is set to quadruple between 2020 and 2028 (CAGR 18.7%) to exceed 100,000 tonnes per annum in 2028.

While the DFS will focus on supplying high quality kaolin to the ceramics industry, the company will also add on additional pre-feasibility studies for potential applications in other markets.

The company has secured an initial offtake agreement with Japanese company Plantan Yamada.

It is also investigating the potential for the use of its high purity kaolin in technical porcelain for power applications, as well as in the concrete and the high-end paint and coatings industries.

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Kaolin is used in a range of materials including ceramics.

MoU with AEM Technologies

In late May the company signed an MoU with AEM Technologies Inc to explore a joint technical and commercial development under which the company can access AEM’s patented process to construct a facility to produce high purity alumina (HPA) using ADN kaolin.

ADN and AEM, part of the Advanced Energy Minerals group, have also entered an initial 90-day exclusivity period to explore a HPA licensing transaction that includes testing ADN kaolin feed, process feasibility studies and potential licensing and marketing arrangements.

AEM’s Cap Chat HPA Process Plant in Quebec, Canada, uses its patented process to make 99.99% (4N) and 99.999% (5N) pure HPA and is the only facility globally that is capable of producing this from a kaolin feed.

During the exclusivity period, Andromeda will carry out further due diligence and testing on the AEM HPA process, with a large sample of ADN kaolin sent to Cap Chat.

Agricultural research program

In addition, the company, along with partner Minotaur, recently announced a three-year, $2.4 million research project that evaluates how halloysite nanotubes could be used in fertiliser that better delivers nutrients to agricultural crops.

The program will be launched via the companies’ joint research venture, Natural Nanotech.

Soil scientists, agronomists and industry partners will all contribute to the study, which is set to kick off this month and was awarded a research grant from the Cooperative Research Centre for High Performance Soils (Soil CRC), funded by the Australian Government.

Natural Nanotech’s upcoming program will utilise halloysite clay sourced from Andromeda and Minotaur’s Great White Kaolin Deposit in South Australia to analyse if it could be used to create novel fertiliser formulations.

The location of the company's Great White Kaolin Project in South Australia.

Looking forward

The project remains on track for the commencement of open pit mining in February 2022, with the company having designed an extremely economical processing plant on site.

Andromeda plans to start production at around 115,000-120,000 tonnes per year, and then ramp up production quickly, in-line with market demand.

The next step once the DFS is released is to complete the bankable feasibility study, with the aim of securing a final investment decision for the project in late 2021.

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