Andromeda Metals has been granted environmental approval for its Eyre Peninsula kaolin mine
Andromeda Metals has ticked off a crucial milestone for its long-life ‘Great White’ kaolin mine it is planning to develop near Streaky Bay.
Andromeda Metals shares shot up more than 20 per cent after the company received a key state government approval for its Great White kaolin project on the Eyre Peninsula.
The Adelaide company’s Program for Environment Protection and Rehabilitation (PEPR) has been approved by the state government, which the company says is a “significant step forward’’ for the project.
The Great White kaolin project, to the east of Streaky Bay, is expected to operate for 28 years, mining high-purity kaolin which is used in ceramics and other industrial production processes.
The Great White deposit also contains rare kaolin known as halloysite - a naturally occurring “nanotube” which Andromeda says attracts a premium price because of its applications in areas such as carbon capture, water purification and renewable energy
Andromeda said early stage site preparation for the new mine was expected to start in coming months and funding for the first stage of operations was “currently under consideration and may include a range of debt and equity mix options’’.
The company’s managing director James Marsh said the approval was an important step for the company.
“We are very excited to have received approval of the PEPR as it brings Andromeda closer to becoming a globally significant producer of halloysite-kaolin products,’’ he said.
“With this important regulatory milestone now achieved, Andromeda is poised to progress towards construction, as we advance funding discussions which will enable a final investment decision.’’
The company said in a statement to the ASX that while waiting for the PEPR approval it had continued to progress work on the project’s engineering.
“Front End Engineering Design (FEED) and supporting construction plans for the Stage 1A are in readiness to progress with early-stage site preparation works,’’ the company said.
“With the PEPR now approved, these early-stage works are anticipated to proceed in the coming months, including land clearance, road works, fencing installation, and on-site facilities.
“During this time, Andromeda will continue to refine the project’s budget, schedule and technical designs ahead of an anticipated final investment decision.
“The procurement of Stage 1A long lead items is continuing, and the company is preparing for the delivery of all long lead items by late 2023.’’
Andromeda has five binding offtake agreements already signed with companies committed to buying product from the mine, which has an expected capital cost of $50m-60m.
Energy and Mining Minister Tom Koutsantonis said once it was up and running, the Andromeda project was expected to create about 40 local jobs initially with hopes for a further expansion of up to 70 jobs, which was “great news for the people of Streaky Bay’’.
“The PEPR approval for Andromeda’s Great White Kaolin project signals the company’s transition to mining operations, its confidence in South Australian resources - and that the state is open for business,’’ he said.
“Andromeda’s success demonstrates how good engagement with stakeholders, including the local community and land holders, can achieve positive outcomes.
“While Kaolin is an important ingredient for many everyday products, including paint and porcelain, the deposit also contains halloysite, which has applications for renewable energy, carbon capture and water purification - all in line with our state’s focus on achieving net zero carbon emissions by 2050.’’
Andromeda shares were 21.9 per cent higher at 5c in early trade on Thursday.
ADN Price at posting:
4.7¢ Sentiment: Buy Disclosure: Held
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