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An emerging force in
ANDROMED
MINING | ANDROMEDA METALS
n industrial minerals
DA METALS
Andromeda Metals is a slightly misleading name and the result of a hangover from a previous life, according to the company’s managing director James Marsh. A more appropriate name, he says, would be Andromeda Minerals, on account of the ASXlisted outfit’s focus on the industrial minerals space. Andromeda’s projects are located in South Australia, but its ambitions are global in that it seeks to become the world’s largest producer of a specialised industrial mineral called halloysite-kaolin. Halloysite is a rare ‘tubular shaped’ derivative of the typical industrial mineral kaolin, which has been used in the manufacture of porcelain products around the world for over 1,000 years. This mature market will provide an attractive, low-risk base for Andromeda to tap into, while there is a growing list of new applications for the halloysite-kaolin minerals that the company will extract from its flagship Great White Kaolin Project. Cutting-edge research into halloysitekaolin has identified uses in concrete, high purity alumina (HPA) production and in nanotechnology, which encompasses a range of exciting blue-sky technologies in high growth areas.
Andromeda’s 75%-owned Great
the industry. This has opened
White project is located in close
a whole new market to us,
proximity to vital infrastructure
which is comprised of the
within the Eyre Peninsula of
coatings market and some very
South Australia and is widely
high performance polymer
regarded as one of the world’s
applications.
largest known high purity halloysite-kaolin resources,
“I joined the company just over
with total ore resources well
two years ago. I was brought in
over 100 million tonnes (Mt)
because I’ve worked in dozens
when the nearby 100%-owned
of countries around the world
Mount Hope Project is factored
on kaolin and kaolin derivative
in.
projects, and this is a very specialised, high value form
The Great White resource
of kaolin. There wasn’t much
is a naturally occurring
kaolin expertise in Australia,
blend of halloysite tubes
so I was brought in to get this
and kaolinite plates at a
project up and going.”
ratio of approximately 40:60 respectively, although Marsh
During the last two-and-a-bit
tells RGN that the company
years, Marsh’s highly competent
is seeking to grow the higher
team have pushed the project
value halloysite segment of the
through the scoping and pre-
resource, particularly in areas
feasibility study (PFS) stages
containing very high purity
and are currently working on
halloysite.
the definitive feasibility study (DFS) and elements of the
“We’ve also found areas
bankable study, which should
of super high purity non-
be delivered in early 2021.
halloysite type kaolin,” he says. “Normally this would be lower value, but it’s the purest material I’ve seen in over 30 years of working in
MINING | ANDROMEDA METALS
Sweetening project economics
transporting a lot of waste
Last year’s PFS contained some
second stage.
material overseas to have it processed somewhere else in a
very encouraging numbers that would even put some gold
“We also feel much better off
projects to shame, according
going straight to a plant on-
to Marsh. The study expanded
site while the world situation
the LoM to 26 years and
is a little bit uncertain at the
revealed a 35% increase to the
moment. We’d be far wiser to
pre-tax NPV to A$736 million,
keep everything in our own
using an 8% discount rate. The
control, including production
IRR remained unchanged at
and our sales.”
175%. Towards the end of 2020, Project economics were
Andromeda updated its
sweetened by a switch in the
mineral resource estimate for
mining method from a dry to
the Great White resource by
a wet process. The original
33% to 34.6 Mt of bright white
plan was to generate cash flow
kaolinised granite, following
from an initial direct shipping
a series of successful drill
ore phase, but substantial
programmes.
growth in Andromeda’s market capitalisation over the last
Fellow ASX-listed firm
six months has provided the
Minotaur Exploration holds
bandwidth for an on-site
the remaining 25% interest
process plant that will produce
in the Great White project
a refined product of higher
and is a trusted JV partner of
value.
Andromeda’s, owing to longterm ties with Marsh. “I was a
“The decision to go straight to
consultant for Minotaur about
a final product was a big step
12 years ago, so I knew them
forward in the value of the
very well before I got involved
project. It also means we aren’t
with Andromeda.
MINING | ANDROMEDA METALS
“We are very lucky with our resource because there are other halloysites around the world, but not all halloysites are equal and some don’t work in certain applications. What we have is the perfect shape and structure” James Marsh, Andromeda Metals managing director
“We’re the managing operator
industries. The company
of the project and have been
started by targeting the high
driving the whole process
end of the ceramics market,
forward, but they listen
where customers value
and make comments where
the high quality halloysite
required. Together, we have
component.
factored the latest resource upgrade into our current work
“Customers in this market
on the DFS.”
have used halloysite for
Offtake orders
decades, but current producers of the high value material have
Since 2018, Andromeda has
fallen by the wayside. They’ve
been busy securing non-
either run out of material
binding offtake agreements for
due a natural depletion of
its halloysite-kaolin products
resources or they’ve been shut
with customers from multiple
down.”
MINING | ANDROMEDA METALS
Until recently, China was one
and we’ve got over 200,000
agreed offtake for up to 400,000
of the leading global halloysite
tonnes per annum (pa) of non-
tonnes pa of this material.
producers, but a recent
binding offtake agreements for
government crackdown on
this product.”
polluting mines led to closures
This is combined with around 300,000 tonnes pa of
of several operating mines.
In addition, the company
unprocessed ore which has
These shutdowns have created
looked at the market for semi-
been signed up for offtake
a gap in the market that
processed material, which
with customers who have
Andromeda has been quick to
requires the removal of sand
had their own mines shut
capitalise on.
from the orebody (50% of
down, and who appreciate
the material that comes out
that Andromeda’s product
“We targeted those customers
the ground is sand) using the
conforms to the typically high
who will be using the fully
simple wet process to produce
standards of the Australian
refined product, which sells
a product worth around A$400
minerals sector.
for around A$700 per tonne,
per tonne. Andromeda has
Fortunately, Andromeda is
1 Mt of offtake signed up
Educating investors
and we are in the process of
While investors on the ASX
global attention towards areas
converting them to binding
have a good grasp of the
such as hydrogen production
offtakes. We also have about
uses of kaolin in established
and storage, carbon capture
six tonnes of final product
markets, such as ceramics
storage, lithium-ion batteries
that has been completed and
and paper, Andromeda has
and water purification – all of
packaged for us in Japan. We
been doing its best to educate
which depend on nanotube
will now use that to convert
shareholders on the higher
technologies, according to
our customers and any new
value markets for halloysite-
latest research.
ones to binding offtakes,
kaolin and in the myriad new
which will take us through
applications across several
In fact, Andromeda and
the bankable feasibility study
high growth sectors.
Minotaur recently formed
“All in all, we have just under
stage.�
benefitting from increasing
a 50:50 JV research and
MINING | ANDROMEDA METALS
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A ND RO M E DA METALS AT A G L A N C E
development (R&D) company
“We are very lucky with our
called Natural Nanotech in
resource because there are
order to capitalise on the
other halloysites around the
opportunity to become a
world, but not all halloysites
world leader in associated
are equal and some don’t work
nanotechnology.
in certain applications because the shape and structure is
“Our R&D company will
not quite right. What we
focus on pushing these
have is the perfect shape
ASX:AND
new applications through
and structure. We are lucky
MARKET CAPITALISATION
to intellectual property and
we have these materials and
hopefully commercialising
our research is progressing
those opportunities for the
quickly.”
STOCK TICKER
A$656.5 million (as of January 5, 2020)
aj
halloysite from the Great White resource,” Marsh
Carbon Capture Technology
proclaims.
(CCT) is one form of nanotube
MINING | ANDROMEDA METALS
technology that has been
Australian state government
The existing market –
proven and is being adopted
within the next 12 months.
comprised primarily of high
by the Indian navy for
quality ceramics – provides
carbon capture in submarine
Marsh anticipates no major
a low volatility base for the
emissions. The material
barriers with regards to the
company to comfortably
required for this technology is
final government processes:
service with its products,
selling for an eyewatering A$3
“We have strived to choose
ahead of the transition
million a tonne, and Marsh
a model that is simple and
into higher value mid-term
believes that the halloysite
low impact. The mining is
opportunities in concrete,
version of this technology will
very shallow and will only
coatings and polymer
be further multiples of that.
go around 30 metres down
applications, amongst others.
and there will be no nasty In addition to nanotube
chemicals or tailings dams.
technology, Andromeda is also
“Looking to the longer term - but coming through
guiding investors towards the
“We are going to backfill
quite rapidly now - is the
uses of halloysite-kaolin in
and rehabilitate the project
potential for a halloysite
concrete, where its potential
mining area as we progress
nanotechnology business.
value could be anywhere
to minimise the footprint,”
This is extremely exciting as it
between A$1,000-4,000 per
he continues. “The
could completely overshadow
tonne, while Andromeda’s
environmentals are now
the already attractive numbers
production costs would centre
complete, we are just waiting
we have in our PFS.
on simply removing the sand
for sign off by the consultants.
from the ore.
“We feel that we have “We see our value proposition
something here of great
as us being the biggest,
interest,” Marsh concludes.
possibly the world’s only,
“By 2022 we should be into
Andromeda is targeting first
producer of high purity
revenue. Shortly after we
commercial production from
halloysite and halloysite-
can expand into other areas
the Great White project in
kaolin. And we’ll be supplying
and start bringing through
early 2022, provided that
it into three different market
these exciting new high value
the company is granted
segments, starting with the
technologies.”
environmental and mining
mature base market,” says
permits by the South
Andromeda’s boss.
12-month countdown
Published by Anderson Murray Media Ltd
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