Western Yilgarn lays the groundwork to cash in on strong bauxite market

Western Yilgarn is continuing to grow one of a handful of exciting new bauxite resources in WA as prices for the aluminium feedstock soar.

Bauxite prices are flying, and Western Yilgarn has emerged as a rare small cap in the space. Pic: Getty Images

One of Australia’s top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.

Micro-cap Western Yilgarn (ASX:WYX) is advancing what could be Australia’s next bauxite mine in a rising commodity price environment.

Late last month, Western Yilgarn unveiled a big maiden resource for its Julimar West bauxite project, just 90km northeast of Perth in the northern portion of the Darling Range.

At a 25% aluminium oxide cut-off, the inferred resource stands at 168.3 million tonnes at 36.1% aluminium oxide and 14.7% total silicon dioxide.

Using a higher 35% cut-off grade, the resource stands at 97.1Mt at 40.5% aluminium oxide and 11.3% total silicon dioxide.

The resource was based on historical drilling, with more than 5700 holes for roughly 32,000m drilled previously.

“The deepest hole that ever went into this area was averaging about 10m, as the bauxite is actually outcropping, it's at surface, and the average depth is from zero to 8m,” Western Yilgarn director Pedro Kastellorizos told investors last week.

The resource spans 21.3km of strike and is 1.5km wide, on average, and Western Yilgarn estimates around 60% of its ground remains underexplored.

“Currently we're sitting on 168 million tonnes, but we’re very confident that we can pump that north of 200 million tonnes with some further exploration,” Kastellorizos said.

Aggressive plan

Western Yilgarn is planning to start low-cost vacuum/reverse circulation drilling as part of an aggressive exploration strategy.

The company has identified four main target areas, averaging 6-22km in strike.

“These are actually known bauxite occurrences over the area, so we've got a strike of just over 50km,” Kastellorizos said.

“We know that it’s there, it's just a matter of us coming in, infilling and defining further resources with very minimal effort.”

Alongside the exploration program, Western Yilgarn will kick off a scoping study and work on permitting.

“On the basis of that, we're hoping to have our prefeasibility study kicked off by the end of this year,” Kastellorizos said.

Low-cost entry

Also producing bauxite in the Darling Range are majors Alcoa and South32, but in the southern portion, and both companies own refineries in WA.

Like other bauxite deposits in the Darling Range, Julimar West is a gibbsitic bauxite, which is favoured by smelters for its low silica content.

“Ours is averaging between 2% and 5%, whereas, in other areas, the average is 5-10%, which is more complicated as it costs more money to extract that silica out to increase the actual aluminium content,” Kastellorizos said.

Given its proximity to Perth, Julimar West is close to major roads, power, rail lines and the ports of Kwinana and Fremantle.

“In terms of establishing a potential viable mining operation, these are critical key components when you're dealing with a bulk handling commodity in that a lot of infrastructure is already there,” Kastellorizos said.

“Everything is in there in terms of its main infrastructure, and we are looking at a low-cost entry to the actual bauxite mining scenario.”

Bauxite rising

Bauxite prices were strong in 2024 and made headlines late last year for surpassing the spot iron ore price.

According to Shanghai Metals Market, the Australian bauxite price has averaged US$87 per tonne this month.

“Bauxite markets are tight due to strong demand growth from China at a time when supply is constrained,” Shaw and Partners said this month.

“Indonesia has implemented export bans, Chinese domestic production is declining, and Guinea is experiencing supply disruptions. China has become reliant on supply from Guinea which now accounts for about 70% of China’s bauxite imports.”

Kastellorizos said inventories were low and currently sitting at 50-55 days.

“We've seen exponential growth in the price of bauxite in the last three months, and that's due to basically not enough bauxite on the market, because there are trade restrictions out of Guinea,” he said.

“There is a very strong push as aluminium is becoming more of a green energy metal as well.

“Our grade is a lot higher than what is currently being mined, so that's another big plus for us moving forward.”

At Stockhead, we tell it like it is. While Western Yilgarn is a Stockhead advertiser, it did not sponsor this article.

Originally published as Western Yilgarn lays the groundwork to cash in on strong bauxite market