General comments/chat, page-17023

ADN is valued for the ability to build a good business with low cost, low risk, low dilution and then quickly move to self-funded growth. The market is factoring this into price sentiment.

Whilst ADN get a strong foundation for the business in place with the first project they can progress strong opportunities in parallel ( Paints & Coatings, Concrete additives, HPA feedstock ) that they can quickly turn on the tap for growth and diversification of revenue streams ( a sensible approach in any business ). All of these are great opportunities without looking at the blue sky Halloysite Nanotube applications.

What sort of scenario would most investors prefer?:

ADN

• Unique high quality resource ( business moat )
• Stable / steady price growth of industrial minerals ( particularly kaolin )
• Very low capex ( $50M to $100M ) relative to market cap
• Fast payback ( 15 months from start of works on site )
• High margin ( around 50% )
• IRR 175%
• 11 months to operations on site, ~18 months to first revenue
• Low strip ratio
• Low technical complexity of plant
• Short commissioning period
• Low dilution of shareholders in time to achieve payback
• Can move to growth mode within 15 months of operations on site ( about 25 months from now ).

Others (many mining projects in this category now - working on DFS and then moving to financing)

• Spot commodity ( high competition for some markets )
• Volatile spot commodity pricing
• High capex ( $300M + ), high debt burden
• >= 3 years payback
• Margin less than 30%
• IRR < 50%
• 2-4 years to construction on site ( so ongoing dilution )
• High strip ratio
• High technical complexity of plant ( and hence high risk )
• Long commissioning period
• High dilution of shareholders in the time to achieve payback
• Need to pay off debt burden ( 3+ years ) - 5-7 years for growth allowing for time to get studies complete, financed, constructed / commissioned, achieve payback