Iggy Tan was ahead of the lithium game at Galaxy – perhaps too far ahead – and now he’s back to play the same game with high-purity alumina at Altech. Plus, Great Boulder set to drill numerous large copper-nickel conductors, Breaker ticks the metallurgy box and Anglo Australian thinks big in Kalgoorlie.
Iggy Tan was ahead of his time when he set up Galaxy Resources (GXY) to prosper from the lithium-ion battery boom.
Galaxy is now a $1.2 billion company. But when Iggy left the company in June 2013, the boom had not arrived as expected and times were tough for the company and for Iggy himself.
But since 2014 Iggy has been nurturing his new baby, Altech Chemicals (ATC). And like his ahead-of-the-curve work in the lithium space with Galaxy, Iggy is now doing the same for Altech in the fast-growing high-purity alumina (HPA) space.
HPA is not a big-tonnage market, with global demand of about 25,000 tonnes in 2016. But like lithium, it is a high-growth market, with industry forecasters predicting a 17% compound annual growth rate to more than 86,000 tonnes by 2024.
There are some good reasons for that which go to newer and growing applications for HPA. The stuff is used to make clear synthetic sapphire glass (natural sapphires are coloured by impurities) for use in LED lights, and the scratch-resistant glass used in Smartphone screens and lenses.
And given Iggy’s trail-blazing background in lithium, it’s nice to know another fast-growing use of HPA is as the separator between the anode and cathode in lithium ion batteries. It stops them catching fire, which is something Samsung knows all about.
From that it can be taken that HPA is also a high-value, high-margin business. The 99.99% purity HPA that Altech plans to produce (it is missing the impurities found in 99.5% smelter grade alumina (SGA) used to make aluminium) from its proposed integrated operation involving a kaolin mine at Meckering, some 130km from Fremantle, and a processing plant in Malaysia, currently fetches $US27,000 a tonne. SGA sells for $US400 a tonne on a good day.
So it doesn’t take much production of the stuff to have meaningful financial metrics. Altech is shooting for annual production of 4,500 tonnes of HPA, an amount that the market’s 17% CAGR should comfortably accommodate without any price destabilisation.
On previous feasibility study work, which needs to be updated, the capital cost was put at $US78.7m. Assuming operating costs of $US9,000 a tonne and a conservative selling price of $US23,000 a tonne, the payback period for a “stage one” project of 30 years was estimated at 3.7 years. The pre-tax NPV was estimated at $US357.5m.
Altech has been trading at 14c for a market cap of $A40m. So there is a clear disconnect there between the upside of Iggy’s plan and the current market value. And it’s basically down to financing his HPA ambition.
A critical date is almost upon us – December 14. It’s when German government-owned export credit agencies say yes or no to the debt component of Iggy’s HPA proposal, remembering that German engineering and equipment suppliers will account for about 60% of the project.
Iggy told Resources Rising Stars he is very confident that credit approval will be granted. But he is also realistic enough to admit that it might not. There will be a plan B. But for everyone’s nerves, it would be a great thing, and a game-changing event, if the Germans were to step up to the plate come mid-December.
Great Boulder pleased as Punch at Mt Venn
It has been well chronicled that Great Boulder Resources (GBR) had a stroke of good luck when an assay of the pulp recovered from an old water bore elevated the status of its Mt Venn copper-nickel-cobalt prospect, east of Laverton in WA.
The water bore was drilled in 2015 by GBR’s regional neighbour Gold Road (GOR) in the search for water supplies for its $532m development of the 6.2Moz Gruyere gold deposit in partnership with South Africa’s Gold Fields. When GBR assayed the hole, it came back with a peak result of 1.7% copper and 0.2 nickel, if you don’t mind.
But before GBR had a red-hot copper-nickel prospect on its hands, there was more work to do. And in the handbook of how to find the sort of primary sulphide deposit GBR hopes it is on to, that meant a ground electro-magnetic survey needed to be completed.
It can be said now the results are in, and GBR is pleased as Punch with the findings.
The EM survey identified the presence of big and multiple conductive positions over the 7.5km-long survey area of the Mt Venn intrusion. Importantly, no carbon shales, which can mess with EM results, have been identified in aircore drilling.
The market shared GBR’s enthusiasm with the EM results, pushing the stock 2c or 13% higher to 17c. There’s no surprise that GBR is now getting busy organising a drilling crew to punch in some RC holes in a 3,000m program to put Mt Venn to the ultimate test, all in a market where the appetite for copper-nickel is at its best for years.
Breaker ticks met-test box
Virgin gold discoveries are nice but by their very nature, there is always a nagging doubt that there might be metallurgical issues to derail things.
And so it was with Breaker Resources’ (BRB) at its exciting Lake Roe gold project, 100km east of Kalgoorlie - until yesterday at least.
Yesterday, Breaker was able to report that Lake Roe’s oxide, transition and fresh mineralisation had passed their met tests with flying colours.
It is another tick in the box ahead of a (big) maiden resource estimate late this year for the Bombora discovery, which sits hidden beneath a 5-10m veneer of transported cover.
Breaker said that the met results point to low processing costs, as might be expected from gold recoveries of 95% with low reagent consumption, and with up to 39% of the gold recovered by gravity concentration prior to leaching.
The market liked the met results, pushing Breaker 7c higher to 71.5c. It was a 43c stock at the start of the year.
Anglo Australian thinks big on Kalgoorlie’s doorstep
It’s kind of fitting that with the Spring Racing Carnival upon us that John Jones at Anglo Australian Resources (AAR) looks to have notched a mine discovery of some sort with the first round of drilling at the Think Big gold prospect near Kalgoorlie.
As mentioned here back in early August when Diggers & Dealers was in full swing, Jones was about to kick off a drilling program at Think Big, so named because of the practice of naming prospects on its broader Feysville project area after Melbourne Cup winners.
Think Big won the cup for Bart Cummings in 1974 and 1975, so by extension Jones should have twice the luck in the hunt for gold at Feysville, all of 20km south of Kalgoorlie’s monster Super Pit.
Its early days, but judging by results from the first drilling campaign by AAR at Think Big, that just might be the case. Its Kalgoorlie location has certainly got to help in future determinations on a mine development being possible.
Primary gold mineralisation ranging from 1g/tonne to 1.7 g/t gold over a strike length of 200m and widths of up to 50m (including a best result of 49m at 1.71g/t gold from 33m) were returned. The bedrock target is open along strike with another 1km of Think big to be tested with the drill bit.
The primary mineralisation remained open at depth in some of the holes and was overlain by a supergene-enriched blanket which returned some high-grade hits (including 12m at 7.31g/t from 36m). It is potential sweetener of any future mine development.
Back in August, when AAR was mentioned here, it was a 4.8c stock. It has since motored on to 6.2c for a market cap of $16.5m. It would be nice to repeat that 29% return by picking some winners over the Spring Racing Carnival, but that would be dreaming.
One of Australia’s leading business journalists, Barry FitzGerald, highlights the issues, opportunities and challenges for small and mid-cap resources stocks, and most recently penned his column for The Australian newspaper.
There is another high-purity alumina play on the ASX, in HEG. It has a very good deposit of high grade Kaolin in Victoria, close to infrastructure. Might be worth a look, too.
Iggy follows the remuneration