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Share Watch – 11 April 2021

Azure Minerals (ASX:AZS)

The Azure Minerals share price isn’t the only thing that has grown since the WA explorer hit the big one in its very first drillhole at the Andover nickel-copper project in October.

The VC-07 nickel-copper discovery – now 1km-long, ~ 200m thick and +400m deep – is currently being drilled ahead of a maiden resource in Q4. But at Andover, unlike most sulphide discoveries, there are no ‘false positives’ from EM surveys.

That means find an EM conductor, find nickel-copper sulphides. Azure has completed FLTEM surveying of multiple separate geophysical anomalies located throughout the Andover project area.

The upside is huge. The explorer has now returned massive, semi-massive and matrix nickel-copper in multiple holes at the neighbouring ‘VC-23’ prospect, including:

– 5.8m @ 1.12% Ni and 0.71% Cu from 69.6m

– 4.0m @ 1.69% Ni and 0.21% Cu from 32.7m, and

– 7.0m @ 1.35% Ni and 0.45% Cu from 95.0m

Good continuity of nickel and copper sulphides has now been demonstrated over a ~200m by 100m area, with mineralisation open in all directions, the company says.

Further drilling is planned at VC-23 once heritage clearances are granted. “The new VC-23 discovery is wide-open for further expansion with the mineralisation remaining open in all directions,” Azure managing director Tony Rovira says.

“The downhole electromagnetic (DHTEM) surveying identified multiple off-hole EM conductors that will be a major focus for the next round of drilling. “With the sulphide mineralisation being remobilised from a primary source, we believe that VC-23 could potentially host a mineralised system similar to that at VC-07.”

With ~$34m in cash, the highly successful Azure team is well funded to test the size of this exciting new discovery. “We’ve started 2021 at Andover with strong momentum on several fronts,” Rovira says.

“Drilling continues to expand the substantial body of Ni-Cu sulphide mineralisation at VC-07, while our first reconnaissance drilling on another high priority target has resulted in a new discovery of significant nickel and copper sulphides at VC-23.

“Furthermore, the company’s ongoing geophysical exploration continues to identify more prospective targets for drilling, demonstrating the highly prospective character of the entire Andover project.”

Andromeda Metals (ASX:ADN)

Demand for halloysite, a rare derivative of kaolin, is high as demonstrated by Andromeda Metals signing a binding offtake agreement with a Japanese customer last month for the supply of 5,000tpa of a premium ceramic grade product.

But it is the conversion of kaolin into high-purity alumina (HPA), which is used in a variety of high-tech applications, including coating porous polymer separators that are used in lithium-ion batteries to improve safety by improving thermal performance, that could really see the white mineral take off. CRU Consulting has forecast that HPA demand could climb from some 30,000 tonnes per annum in 2020 to 272,000tpa by 2028.

Kaolin is one of those minerals that is used in everyday life but is consistently overlooked, unlike higher profile mining products such as rare earths, lithium and gold. Yet, a closer look at what it is used for shows how indispensable kaolin actually is. Paper, rubber, paint, ceramics, fibreglass, cosmetics and pharmaceuticals are just some notable examples with about 5kg of kaolin used in the manufacture of each car.

According to Grand View Research, the kaolin market is expected to climb from $US4.76bn in 2019 to $US6.3bn by 2027 with current supply impacted by environmental constraints and the exhaustion of premium production in the UK and US.

Other players to watch:

Altech Chemicals (ASX:ATC) has been progressing its HPA plans for several years now and has just commenced pre-feasibility studies for construction of a battery materials HPA plant in Saxony, Germany.

Under the proposed first phase, the plant will be capable of producing 10,000tpa of anode graphite using the company’s alumina coating technology.

It had previously reported that the testing of batteries with graphite particles coated with HPA using its technology had exceeded expectations, though no details were provided.

The company is also in the midst of securing the balance of finance for its Malaysian HPA plant.

Latin Resources (ASX:LRS) holds the Noombenberry project in WA where recent drilling has intersected high-grade halloysite and ultra-bright kaolin zones.

The latest results show consistent high grade halloysite with assays topping up at 8m at 35 per cent halloysite within a broader 26m intersection grading 24 per cent halloysite. Preliminary work for the upcoming JORC resource is on track for release in the second quarter of 2021.

PepinNini Minerals (ASX:PNN) is one of the new entrants into the kaolin scene with managing director Rebecca Holland-Kennedy saying that the company had been looking for a suitable project for some time.

She noted that its recent acquisition of Hillside Minerals and its kaolin clay tenements in South Australia was sparked by the market interest in Kaolin, or potentially the higher grade halloysite product, which could command a premium price while remaining simple to explore for.

“The market for halloysite is increasing as uses are defined. So we see potential for growth and with relatively simple exploration and processing and the location in South Australia a project that complements our lithium project,” Holland-Kennedy added.

“We would be looking at the HPA sector as halloysite is a feedstock for HPA manufacture.” The two Hillside licences directly adjoin Andromeda’s tenements and cover 1,129sqkm with recorded occurrences of kaolin clay.

Upcoming work includes regional interpretation, reconnaissance work and mapping, geophysics and drilling.

Suvo Strategic Minerals (ASX:SUV) owns Australia’s only operating hydrous kaolin plant – the Pittong plant in Ballarat, Victoria, which it acquired from French multinational Imerys S.A. late last year.

Executive chairman Robert Martin says that the company plans to quadruple production from Pittong over the next 18 months and is also in the process of developing an ever-larger plant in Western Australia.

“Having the only plant capable of producing hydrous kaolin allows us to access the higher value end user markets. We’re targeting paper, paint, ceramics and coatings,” he noted. “We inherited more than 360 clients when we bought Pittong, so we have a ready-made market.

Financial indicators

The VIX fear gauge down since 4 April by 0.64 of a point to 16.69.

The Dow Jones Industrial Average up 647.39 points or 1.95% since 4 April to 33,800.60, the STOXX 600 up 4.99 points or 1.15% to 437.23 and the Shanghai Composite index up 1.82 points or 0.10% to 3,450.80.

Gold on 1,744.10. US 10-year Treasury Bonds down to 1.660 and oil down to 59.34. Cryptos Bitcoin up by 2,186 points or 3.74% to 60,649.

ASX 200 up 166.50 points or 2.44% since 4 April to 6,995.20 today. The Aussie dollar up to 76.22US cents.

Eco Market Spot Prices

LGC $32.75

STC $38.70

ESC $30.15

VEEC $51.95

ACCU $18.50

Sources: RenewEconomy, demandmanager,  Reuters, SMH, Market Watch, Stockhead

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