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Andromeda Metals reveals improved economics of wet processing at Poochera Halloysite-Kaolin Project

Wet processing at site provides improved kaolin recoveries over dry processing leading to additional revenues and lower cost per unit sold.

Andromeda Metals Ltd - Andromeda Metals reveals improved economics of wet processing at Poochera Halloysite-Kaolin Project
Raw kaolinised granite after auger sampling

Andromeda Metals Ltd (ASX:ADN) has delivered an updated scoping study to consider on-site wet-processing of kaolinised granite sourced from a proposed open-cut mine at the Carey’s Well deposit within the Poochera Halloysite-Kaolin Project in Eyre Peninsula, South Australia.

The updated scoping Study builds on the highly positive original scoping study (OSS) released in September 2019 which was based on dry-processing on site and confirmed the potential for the Poochera Halloysite-Kaolin Project to be a long-term supplier of high-quality halloysite- kaolin product able to meet growing global demand from ceramics industry manufacturers.

Key project statistics

The updated scoping study again considers an initial phase of Direct Shipping Ore (DSO) and toll wet-refining overseas to generate early cash flows that will be used to fund the majority of costs associated with the construction of an onsite wet-processing facility during the second year of operation.

Production is then scheduled to convert to on-site wet-processing of mined kaolinised granite to remove the majority of the contained quartz sand, which will generate significant transport and shipping savings, with the concentrated kaolinitic product shipped in bulk as filter cake rather than in bags, for toll wet-refining in order to produce a premium bright-white halloysite-kaolin product.

Wet-processing allows bulk transport and shipping of filter cake to be used, which has a lower cost per tonne than the bagged transport considered for the dry-processing option.

Wet process design flow sheet

Offsetting the transport cost saving per tonne transported, the wet process has a lower concentration of kaolin clay and a significantly higher moisture content in the transported material, so the total transport cost per tonne of final product is increased.

The prime advantages identified of wet-processing over dry-processing at site is that it delivers improved recoveries of refined kaolin clay material made available for sale and hence generates considerably higher revenues, in addition to providing lower processing costs due to the operating efficiencies of the wet processing plant that is proposed.

These advantages are partially offset by increased transport and shipping costs on account of the increased moisture content in the kaolin material shipped and a modest increase in capital costs for the wet-processing plant.

This is reflected in a reduction in the average all-in sustaining cost (AISC) reported for wet-processing in comparison to dry-processing that was considered in the OSS.

The updated scoping study has been based upon the February 2019 resource used for the OSS of 9.7 million tonnes of kaolinised granite.

Next steps

The anticipated timeline for the project development is to complete a pre-feasibility study by the second quarter 2020, and to then conduct environmental impact assessments and prepare a mining proposal application over the balance of the 2020 calendar year.

Subject to satisfactory progress negotiating agreements with key stakeholders, obtaining of all necessary regulatory approvals and completion of a subsequent definitive feasibility study, the commencement of operations is targeted for late 2021.

The impact of the COVID-19 pandemic is immeasurable and is likely to affect global and local business access and therefore influence these targets.

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