Australian Strategic Minerals Ltd (ASX:ASM) has hit several key milestones as it moves towards becoming an independent fully integrated mine-to-metal producer of critical materials.
Following its demerger from Alkane Resources Limited (ASX:ALK) (OTCMKTS:ALKEF) and the listing of its shares on the ASX on July 30, 2020, the company can now focus on its critical materials and value-added production, especially its cornerstone Dubbo Project in Central West NSW.
The demerger of ASM also paved the way for Alkane to focus exclusively on becoming Australia’s next multi-mine gold producer.
ASM has two key initiatives - its Dubbo Project, which is ready for construction, and its independent metals technology facility.
Shift up a gear with Ziron Tech
ASM’s partnership with its Korean joint-venture partner Ziron Technology Corporation shifted up a gear last week when it entered into a heads of agreement (HOA) to buy a 95% stake in the company, taking Ziron within the ASM umbrella.
In 2019, ASM initiated a joint venture with Ziron Tech to pilot the production of hafnium and zirconium by combining its proprietary process with Ziron Tech’s metallisation technology which was developed at South Korea’s Chungnam National University.
Under the HOA, ASM will acquire the ownership of all associated intellectual property, including patented metal-refining technology, as well as the pilot plant constructed in 2020 to confirm the technology.
Ziron Tech's team will continue the development of metallisation technology within the ASM umbrella.
ASM managing director David Woodall said: “Our joint venture and strong relationship with Ziron Tech since 2016 has achieved significant milestones, with the successful production of metals using this clean technology.
“This agreement marks the start of the next phase of this positive partnership with Ziron Tech as it becomes part of ASM.”
Ziron Tech’s founder, Professor Jonghyeon Lee will be appointed chief technical advisor to lead the Ziron Tech team and the continued development of clean metal processing.
Woodall said: “With Professor Lee and his team on board, we are looking forward to establishing the first commercial-scale metal plant in Korea using the technology, which will help meet the growing demand for ASM’s range of high-purity and value-added critical metals used in advanced technologies, including electric vehicles and clean energy.”
The patented technology is a more environmentally friendly, sustainable and cost-effective alternative to existing conventional, energy-intensive metallisation processes.
This technology has been successfully applied during pilot plant test-work to all major metals found within ASM’s Dubbo Project, including zirconium, hafnium, and rare earths for permanent magnet alloys.
The HOA also provides an opportunity to expand the business with the production of titanium metal and associated alloys.
In addition to the issue of 1,306,417 ASM shares as consideration of US$2 million to current Ziron Tech shareholders (via a holding entity) at an issue price of $2.068 per share, it will also grant existing Ziron Tech shareholders (via a holding entity) a net smelter return of 5% from any global commercial metallisation facility established using the technology.
The NSR is subject to a 50% step-down of the royalty after payments of US$20 million have been made.
This transaction is expected to be completed by the end of October 2020.
Cornerstone Dubbo Project
ASM’s cornerstone Dubbo Project has a long-term resource of ‘critical materials’ including zirconium, rare earths, niobium and hafnium.
These materials are used in a range of sustainable technologies and new manufacturing industries such as renewable energy and electric vehicle production.
Together with Ziron Tech, ASM is advancing oxide separation and metallisation technologies to create a range of value-added materials from the Dubbo Project.
ASM is progressing pilot plant test-work on low emission, high purity metal technology to produce zirconium, titanium and rare earths for permanent magnet metals.
The Dubbo Project is ready for construction, subject to financing. All major state and federal approvals and licences are in place, along with an established process flow sheet and solid business case.
ASM is monitoring market demand for these critical materials and will seek further investment for this project when the time is right.
The company is progressing an optimisation study for the Dubbo Project inclusive of flotation that has potential to positively impact the capital and operating costs of the project.
The metals feasibility study is planned to be completed by the end of 2020 with the optimisation study to be completed by the end of the first quarter of 2021.
Metals technology facility
ASM has undertaken more than 10 years of development with the Australian Nuclear Science and Technology Organisation (ANSTO) to recover, purify and add value to the outputs of the Dubbo Project, increasing its range of products and profitability.
The pilot plant of its metals technology facility commenced production in mid-2020, allowing a definitive feasibility study, and:
➢ Providing an opportunity to prove capability for commercial-scale production of hafnium and zirconium;
➢ Enabling ASM to build strategic customer relationships for offtake agreements;
➢ Establishing the capability to process other Dubbo Project outputs, including rare earth metals, in Australia and South Korea, and
➢ Growing a sustainable business to enhance ASM’s financial status.
ASM’s patented reduction process was used to produce 7.6 kilograms of neodymium metal assaying 99.8%, a higher purity than typically traded neodymium metal.
This result validates the company’s patented carbon-free metallisation technology for rare earth metals and is the latest in a series of production runs that have confirmed this method uses up to 50% less energy than current commercial production methods.
Woodall said: “This is a significant result for ASM, as this process has resulted in the production of neodymium metal at a higher purity than typically traded.
“My team and I have travelled to South Korea to discuss the significant potential of ASM’s integrated strategy with various Korean government and business groups.