Chrysos tests global gold expansion
The environmentally friendly element of the mining process has helped Chrysos secure $95m in green loan funding from the Commonwealth Bank.
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With some of the world’s biggest resources companies – including Canada’s Barrick Gold – among its blue-chip customers, gold sample testing company Chrysos Corporation is forging ahead with a global expansion plan as it looks to revolutionise a centuries-old technique still used by most of the world’s gold miners.
Just a year after relocating its head office and main assembly plant to the Tonsley Innovation District at the former Mitsubishi manufacturing site in Adelaide’s south, ASX-listed Chrysos is building an expanded facility next door to cater to the heightened demand for its flagship product PhotonAssay.
Developed over 15 years by the CSIRO, PhotonAssay uses high-powered X-ray technology to bombard rock samples and activate atoms of gold and other metals, before a detector is used to determine gold concentrations in minutes.
It is pitched as a faster, safer and more environmentally friendly alternative to the conventional fire assay method of gold analysis, which has been used for more than 2000 years.
Chrysos acquired the technology in 2016 and has been commercialising it through an increasing number of orders to miners and laboratories across the world.
The company is cashflow positive, with 29 units deployed globally, including with major customer Barrick, which last October committed to a rollout of the PhotonAssay technology at its mine sites.
Chrysos managing director Dirk Treasure, who was one of the first two employees of the company alongside inventor and co-founder James Tickner, said that while the level of gold exploration activity had been subdued over the past couple of years, adoption of the PhotonAssay technology had been ramping up.
“If you look at the global mining industry it tends to be a fairly conservative industry, and technology adoption can take a while, but actually adoption of PhotonAssay has been significantly faster than the typical adoption profile,” he said. “There’s really no reason why any producing mine would stick with the old fire assay technology where they’ve got PhotonAssay available.
“So our goal is really to become the dominant gold analysis technique, or even the ubiquitous gold analysis technique, and to do so we’re working with those big gold miners, working with those big laboratory companies and working through a global adoption of the tech. From humble beginnings as just an Australian company, we’re growing around the world pretty quickly.”
Chrysos was the biggest public float in 2022, when it raised almost $184m in an IPO with an issue price of $6.50.
After peaking at more than $8.50 at the beginning of the year, the company’s shares had fallen back to $5.68 by Friday’s close.
The CSIRO remains the company’s largest shareholder.
Chrysos has a business model where revenue is generated from customers paying regular payments for analysis undertaken on site under long-term leases that include regular maintenance and servicing.
The company’s full-year results, released last week, revealed a 69 per cent increase in revenue to $45.4m, helping to generate earnings (EBITDA) of $9m, up from $3.5m in the previous year.
An EBITDA range of $9m to $19m is expected in 2024-25, on revenue guidance of $60m-$70m.
While PhotonAssay can be applied to other minerals including silver and copper, gold is the main game, according to Mr Treasure, given the outdated fire assay process, which involves heating samples to 1200C and waiting more than 24 hours to discover how much gold samples contain.
“Fire assay dates back something like 2500 years ago … and we’re coming in with this green, X-ray powered analysis technique that is much faster, more accurate, larger sample size, lower CO2 generation, and much better for operators from a health and safety perspective,” he said.
“And from a cost perspective, costing industry no more than what the fire assay technique does. So we’re coming through … with a better technique at the same or better cost.”
The environmentally friendly element of the process has helped Chrysos secure $95m in green loan funding from the Commonwealth Bank.
Originally published as Chrysos tests global gold expansion
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