Poochera project on track

Poochera project on track

Andromeda Metals will continue to ramp-up work over the coming months at its Poochera halloysite-kaolin project site.

The company will aim to bring the proposed initial $25-million mine to the market as soon as possible to meet emerging demand from new technological products.

Speaking at the recent 2019 South Australian Exploration and Mining Conference in Adelaide, Andromeda managing director James Marsh said it had attracted letter of intent agreements for a total of almost one million tonnes per annum of products.

"We will be launching an extensive drilling campaign at Poochera next month with a view to announcing a resource upgrade by year's end," he said.

"There will be additional halloysite purification testing over December and we hope to achieve land access agreements by early in the new year.

"Environmental and feasibility studies and mining leases approvals will be heightened over 2020."

Andromeda's aim is to commence an anticipated 15-year mining operation in mid-2021 - starting with initial mining and exporting of product, before developing a processing plant on site.

A recent scoping study found the site could generate a life-of-mine cashflow of $800 million and revenue approaching $2 billion.

"Our maximum cash requirement to get into the initial mining operation and export of direct shipping ore material to China, is low capex, in the order of $25 million," Mr Marsh said.

"We anticipate break even payback within just 15 months of start-up at a time there is increasing supply restrictions internationally for our specialist kaolin."

Historically used in ceramics and catalytic converters, it is also being used for hydrogen storage, batteries and water purification.

Mr Marsh said Andromeda had "the right product at the right time in the right place" as South Australia had one of the world's largest halloysite-kaolin resources, as global demand has increased and production decreased.

Andromeda plans to export through ports at Lucky Bay, Thevenard, Port Lincoln and Whyalla.