Pure Minerals Ltd (ASX:PM1) has boosted its cash balance after receiving a refund of $683,000 as part of the R&D tax incentive for the financial year ending June 30, 2020.
The funds have been used to repay a loan facility provided by Metamor Capital Partners which was drawn down to $632,000 with the facility now closed.
A significant portion of the company's forecast expenditure relating to pilot plant activities will likely be eligible expenditure under the R&D Tax Incentive for the 2020-2021 financial year.
Pilot plant activities
During the September quarter, the company made ‘significant’ progress on pilot plant works at the ALS Global Hydrometallurgy Centre of Excellence in preparation for its first run which is expected this month.
PM1’s wholly-owned subsidiary, Queensland Pacific Metals Pty Ltd (QPM) assessed two options for piloting activities:
- Use of existing DNi ProcessTM pilot plant located at CSIRO, which required refurbishment and modification; and
- Undertaking piloting activities at ALS Global Hydrometallurgy Centre of Excellence (ALS Global).
After tending the various work streams required, it was decided that undertaking the pilot plant trials at ALS Global was the preferred option from a cost and schedule perspective.
Several key tasks were either advanced or completed in preparation for first pilot plant trials in November.
These include:
- The establishment of pilot plant team which includes representatives from QPM, Altilium (formally Direct Nickel), ALS Global, CSIRO and Hatch;
- Preparation of bulk sample including drying and assaying;
- Confirmatory batch test-work as part of pilot plant set up and equipment selection;
- Finalisation of flowsheet and pilot plant set up; and
- Ordering of consumables.
QPM remains on schedule to begin piloting in November.
Offtake discussions
To date, the majority of QPM’s offtake marketing efforts have been focussed on Asia, largely due to constraints associated with COVID-19.
Moving forward, QPM plans to increase its efforts to include Europe and North America.
During the quarter, extensive discussions were held with potential customers interested in purchasing nickel and cobalt from the TECH Project, in the form of mixed hydroxide precipitate (MHP) or sulphate battery chemicals.
These discussions have culminated in Pure Minerals entering a non-binding Memorandum of Understanding with LG Chem Ltd.
As part of the MOU, Pure Minerals and LG Chem have agreed to negotiate in good faith to enter into a binding offtake agreement on the following key terms:
- 10,000 tonnes per annum contained nickel in the form of MHP or nickel sulphate;
- 1,000 tonnes per annum contained cobalt in the form of MHP or cobalt sulphate;
- Pricing linked to the underlying price of nickel and cobalt on the London Metals Exchange with consideration given to purity and specification;
- 3-5 year term; and
- Consideration of a prepayment by LG Chem.
The parties will also work together on product specification, so Pure Minerals can meet the technical requirements of LG Chem.
This MOU with LG Chem is a significant milestone for Pure Minerals, as LG Chem is the largest producer in the world of lithium-ion batteries and a top 10 global chemicals company.
