Pure Minerals Ltd (ASX:PM1) is on the funding pathway for the Townsville Energy Chemicals Hub Project (TECH) Project in Queensland and aims to deliver strong returns by advancing and de-risking the project.
During September the company raised $4.4 million with proceeds to be used on pilot test-work including production of intermediate products and subsequent refining to battery-grade chemicals, advance approvals, feasibility work and infrastructure at the TECH Project as well as for general, corporate and admin works.
Pure Minerals' wholly-owned subsidiary, Queensland Pacific Metals Pty Ltd (QPM) is advancing the project which is currently in the feasibility stage with a bulk sample sourced from New Caledonia partners and transported to Perth.
During the fourth quarter of 2021 Pure Minerals aims to assemble and operate the direct nickel plant at ALS Global.
Remaining pilot plant activities aim to:
- Demonstrate the flowsheet with representative ore;
- Produce samples for potential customers;
- Generate results to feed directly into a bankable feasibility study;
- Provide opportunities for investor visits; and
- Clear the path to start definitive feasibility study.
Pathway to funding
Pure Minerals pathway to funding includes achieving success in the project feasibility stage to increase the value of the company and open doors to funding opportunities for project construction.
- Project partners: Strategic opportunity for a ‘Big Brother’ to be involved in a project that would be a game-changer for the nickel industry
- NAIF: TECH Project could be suitable for NAIF funding being in Northern Australia and with many social benefits for Townsville and surrounding region;
- Export Finance Australia: EFA is targeting assistance to critical minerals projects, which the TECH Project will produce;
- Offtake finance: Offtake is in high demand given the lack of nickel supply – end-users understand the need for project participation or funding to secure offtake; and
- International Export Credit Agencies: Potential to obtain international ECA funding, particularly for plant and equipment being sourced from overseas.
- Project partners/offtakers: Securing project or offtake participation by way of equity investment;
- Institutional investors: Traditional equity investors targeting critical minerals investment; and
- Green funds: Many funds targeting green investments and the emerging EV sector.
Well-positioned for power, transport and water
The site for the project has been allocated to QPM in the Townsville Industrial Precinct which comprises:
- Water pipeline;
- Gas pipeline;
- Electric transmission lines;
- Fibre optic communications;
- Existing Ross River and edify solar arrays;
- Road train access to Townsville Port (via Flinders Highway);and
- Rail line.
Ideal infrastructure setting.
Three main focus areas for the company in the near-term remain on piloting and feasibility, marketing and offtake and project advance in Queensland at the Lansdown property.
Piloting and feasibility -
- Piloting of DNi process on New Caledonian ore to produce MHP, haematite and aluminium hydroxide;
- Piloting of process to refine MHP to battery-grade nickel sulphate and cobalt sulphate;
- Piloting of process to refine aluminium hydroxide to 4N HPA;
- Test-work on haematite with Sun Metals;
- Firm up project size; and
- Begin bankable feasibility study works.
Marketing and offtake –
- Provide samples to potential customers;
- Broaden marketing base (current focus has been on Asia); and
- Secure project involvement by way of offtake, partnership, investment or funding with end-users.
Nickel sulphate outlook
Wood Mckenzie, a global energy, renewables, metals and mining research company predicts production of nickel in chemicals could rise from 211,00 tonnes per annum in 2019 to a peak of 450,000 tonnes in 2027.
As demand from the electric vehicle space continues to accelerate, nickel sulphate supply will struggle to meet demand with output expected to peak in 2027.
The EV sector could drive demand to teach 800,000 tonnes per annum nickel by 2035 and it is feasible that these premiums for nickel sulphate in the battery sector will be available in the years ahead.
The sector’s requirements for higher-purity nickel sulphate will be a key consideration for premiums.