Good thread. A few of us were involved very early in the Andromeda story and watched the market slowly grasp Halloysite and the rest is history. After completing extensive DD, we have recently moved our core investment position in the aluminosilicate sector to Zeotech. Not because Andromeda isn't a great company and run by a top Board and Management but the scope of the tech, market size, verticals and potential price leadership of Zeotech, is in our view potentially globally disruptive to a massive scale.
As mentioned before, Halloysite and Zeolite are Aluminosilicates. This sector has now hit the radar of investors as understanding of the multi vertical opportunities grow and it is a matter of time before the potential is recognised. - perhaps a lot shorter than many think given the inroads ADN has made to educate people re Halloysite.
From a pure Kaolin perspective, the Abercorn deposit is from my understanding very easy to process and has low impurities - and they have plenty of water, power and road access. Worth noting that in the case of Andromeda, they are after the Halloysite and have played down Kaolin. With ZEO, Kaolin isn't the main game either but it is a potential feeder for synthetic zeolite production. Any quality Kaoiin prospect is a potential. These are “parallel” players in the space both derived from "Kaolin". (the option to use Kaolin as a HPA feed is also possible)
However - for Zeotech, the feedstock can be both Kaolin and/or other materials such as mining tailings re waste remediation – so can be sourced from anywhere in the world where there is feedstock. No mining permits needed. Waste is a massive issue. A 10 t hard rock spodumene resource has around 7 t of waste. It needs a solution, particularly in this environment where government regs are mounting. These companies have billion dollar market caps and they have a serious problem. BTW. the plants can go wherever there is a need/opportunity. A great story also re environmental management for companies who currently have an expensive waste problem to address.
The $ return per ton for Zeolite is considerable and the capex appears low. I speculate that the economics is likely to be more than comparable but as potential revenue isn't tied to what is in the ground, the deployment is blue sky. Also, as it isn't naturally occurring, Synthetic Zeolite can be “modified” to capture and release a range of waste and other materials. And it is also recyclable. From detergents, to animal supplements to carbon capture (outperforms Halloysite) etc...etc... it is versatile and is of high value. Carbon Capture is a sweet spot for Synthetic Zeolite. It is equally applicable as Halloysite as a concrete additive and has great flexibility for usage and verticals as it can be “tuned”. It can be also used to remove toxins in chickens ,as an example.
The target market size for Zeolite and high value type A is huge. It dwarfs Halloysite. These markets already exist and in fact, some are dormant awaiting a low cost producer to open them up. ZEO looks to have a price advantage in the sector so this is disruptive.
On a "will it work" risk basis, things look very good here. Remembering that the core tech of Zeolite is known and the innovation of Zeotech is built on a tried and true platform.
Both ZEO and ADN are great potential businesses, but as a very early Andromeda investor (.5 cents) and understanding Halloysite - ZEO ticks all the boxes for a compelling investment case at a low market cap relative to how far the company has progressed and the inherent potential of the business model.
Re the questions asked re how much capex and how much production - if ZEO becomes a low cost producer, perhaps one of the lowest there is given the IP, then the existing Zeolite verticals and dormant ones, open up as ready markets. I imagine capex will differ based upon the waste requirements of other players and deployment models; but all things being equal, a low cost producer is likely to look very robust. As for tonnage, given the nature of using others waste, and not bound by geography, it is largely unlimited.
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