Truly hit the nail on the head with why ADN is
1 of the best and rarest opportunities i have ever seen on the ASX. This company is not like your usual mining companies that are lining up with 1000’s of others to say explore and find the next lithium, copper or whatever resource out there and produce it. ADN is unique in that it’s halloysite/kaolin blend is rare and in very high demand globally. Big ceramics companies out of Europe currently import halloysite and blend with kaolin to make this unique blend that ADN have naturally forming in the ground. The halloysite they are blending in with kaolin is in short supply and ADN are in the box seat to take advantage of global supply gaps.
When I initially bought into ADN over 1 year ago i was looking for the next potential hot spot in the market that had yet to have its day in the sun. I had done well from an early entry into lithium stocks in late 2015 early 2016. The lithium run had lost its steam by 2018 and i started searching for the next potential hot spot for the market. I turned to HPA and its numerous new age uses in batteries, LED lights and more. I came across ADN at a very low cap and started loading into the oppies.
After my initial buys in i started doing more research into HPA and its uses but also gave management a call and chatted and then attended a small preso/chat with James Marsh on one of his Melbourne visits. As he sat there and talked about the unique nature of the resource ADN was sitting on and the uses beyond trying to move towards HPA production i was gobsmacked. Not only did ADN have that blue sky potential at some stage to get into the HPA market but it had a here and now huge market demand for it halloysite/kaolin blend into very high demand markets for ceramics, high quality paints and numerous others. He explained his 30 years in the industry working with players like Imerys the huge industrial minerals company out of Paris plus many others. He explained the nature of product required in high end ceramics and paints and how these companies were sourcing halloysite and blending it with kaolin while ADN sat on a rare natural forming halloysite/blend that would take the blending stage out. I asked is this halloysite/kaolin blend plentiful globally and easily sourced. James stated no there isn’t anything like this globally and the end users want it. I went away and tried to find other resource companies with this halloysite/kaolin blend and till today have not found any. The next step was asking what costs and capex would production look like on this halloysite/kaolin resource. This is what blew me away which gave me the indication that ADN was a monster stock in the making. The demand for say dry processed ore had a low capex that potentially could see ADN in production with a dry processing Plant of under 5 mil. These were rough estimates back then but gee I thought hello. Im used to hearing plant and processing costs in the 100s of millions and here i was hearing under 5 mill.
This is the reason i have built a position in ADN which is probably 1 of my biggest rolls ever.
Not only is ADN sitting on a rare opportunity to enter the new age HPA market at some point either through JV or themselves down the track but they right now have the opportunity to produce at a low cost/capex a product that is both unique and rare and in very high demand as we have seen recently with numerous parties lining up for supply. This opportunity does not come along very often and many will look back on ADN as the opportunity they missed. Take for instance a lithium company and their race to first find it, drill out a jorc then the mad rush with how many other companies to get into production first at massive capex and costs. Then look at ADN and how many other companies have what ADN have with its unique in demand halloysite/kaolin. ADN have a jorc resource on the path to fast track low cost production of a mineral that is rare and running out globally. Then throw in the high end HPA production opportunity and then throw in the higher end nanotech opportunity being worked with on with Newcastle uni. Find me another company in this position. Im holding ADN tight as there isn’t an unfolding opportunity out there like this on the ASX anywhere.
ADN Price at posting:
3.2¢ Sentiment: Buy Disclosure: Held
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