Andromeda Metals raises $5m to advance Great White kaolin and HPA projects

Andromeda Metals’ $5m placement will advance its Great White kaolin and HPA projects.

Andromeda Metals has raised $5m to advance its Great White kaolin project. Pic: Getty Images

• Institutional and sophisticated investors provide strong support in oversubscribed $5m placement

• Proceeds will be used to advance development of Great White kaolin project in South Australia

• Funds will also go towards a scoping study for the HPA project

Special Report: Investors have demonstrated their confidence in Andromeda Metals and its plans to advance development of the Great White kaolin project by backing a $5m share placement.

Demand for the placement of 384.6 million shares priced at 1.3c each from institutional and sophisticated investors was so strong that applications had to be scaled-back.

The offer price was at a discount of 23.5% to the previous closing price of 1.7c and is covered by the company’s placement capacity under Listing Rule 7.1.

Participants will also receive three free attaching options exercisable at 1.95c that expire two years from the date of issue for every four shares they subscribe for.

Proceeds from the raising will be used by Andromeda Metals (ASX:ADN) to carry out early works, advanced plant design and engineering along with technical, financial and legal activities to support the funding process for the Great White project.

It will also progress the High Purity Alumina project including the scoping study and product and market development activities.

Growing interest

Acting chief executive officer Sarah Clarke said the company had seen growing interest from a range of new investors in the wake of recent announcements on its development funding process and HPA breakthrough results.

“The significant interest saw robust demand in this placement, demonstrating strong investor confidence in Andromeda’s future,” she said.

“The funds raised from this capital raising will enable us to progress our Great White project in anticipation of a final investment decision, including advanced plant design and early engineering works for Stage 1A+.

“The funds will also allow us to further progress our HPA project, through the completion of a scoping study and product development and marketing activities.

“The strong support for this placement and the increased investor participation leaves Andromeda well placed to advance the Stage 1A+ project to a final investment decision while also progressing development of the exciting HPA opportunity.”

Great White and HPA

The Great White project has a high-grade resource of 15.5Mt that is sufficient to feed a 28-year mine life.

A 2023 bankable feasibility study estimated capex at $194m for a three-stage development that could supply up to 330,000 wet metric tonnes of product per annum, generating an NPV and IRR of $763m and 43% respectively.

Offtake customers have already been signed up for 100% of the capacity of the Stage 1A+ development.

Meanwhile, the company’s laboratory-scale testing has produced HPA with a purity of 99.9985% using kaolin sourced from Great White, well above the 99.99% purity required to be considered 4N HPA for use in lithium-ion batteries as a battery separator, as well as the production of synthetic sapphire glass and LEDs.

This article was developed in collaboration with Andromeda Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Andromeda Metals raises $5m to advance Great White kaolin and HPA projects