Join our daily newsletter At The Bell to receive exclusive market insights
- Andromeda Metals (ADN) releases a DFS update for its flagship Great White kaolin project
- Kaolin is a clay used in ceramics and porcelain
- The company has minted an offtake agreement with Japanese ceramics maker Plantan Yamada
- Net Present Value for Great White jumps 65 per cent to more than $1 billion
- The yearly output will hit 93,000tpa in the first 17 months
- ADN shares are up 19.6 per cent, trading at 3.4 cents at 2:55 pm AEST
Andromeda Metals (ADN) has announced the results of an updated definitive feasibility study for its flagship Great White project, revealing a net present value (NPV) of $1.010 billion.
This NPV marks a 65 per cent increase compared to previous estimates and sees estimated average annual earnings before tax jump to $130 million – a 59 per cent rise.
Kaolin, a naturally occurring clay substance, finds application in ceramic tiles and porcelain tableware, precisely the two principal markets Andromeda aims to target as both off-takers and end users of its product.
To that end, the company inked an offtake agreement with Japanese ceramics and porcelain producer Plantan Yamada.
The company also perceives heightened geopolitical risks and supply chain complexities, potentially resulting in future supply shortages.
This situation could allow Andromeda to capitalise on the upward volatility in Kaolin prices.
Moreover, the company is actively bolstering its ESG (Environmental, Social, and Governance) credentials. Scope 1 and 2 emissions, encompassing those produced on-site and during off-site transport activities, are anticipated to reach 0.17 kilograms of CO2 per Australian dollar of revenue generated.
The company is also boosting its ESG credentials. Scope 1 and 2 emissions – those produced on-site and in transport activities off-site – are expected to reach 0.17 kilograms of CO2 per Australian dollar of revenue made.
Scope three emissions, which include emissions associated with the product after it leaves Andromeda’s control, are relatively higher, prompting the company to seek ways to reduce its footprint as production expands, although specifics were not immediately provided.
Andromeda also has plans to sell industrial sands by-products.
Regarding metrics, the company’s assumptions include an AUD/USD exchange rate of 0.675, corporate costs of $1 million per year, a mine royalty of two per cent until 30 June 2026, which subsequently rises to 3.5 per cent, an assumed corporate tax rate of 30 per cent, and an annual output of 93,000 tonnes for the initial 17 months.
ADN shares were up 19.6 per cent, trading at 3.4 cents at 2:55 pm AEST.
