Ann: Trading Halt, page-46

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The latest cash injection will help to fund completion of the definitive feasibility study for the Townsville Energy Chemicals Hub, and work to support the planned front-end engineering and design studies that are expected to begin in December. Foster is lead manager and bookrunner to a $12 million placement, which is priced at 8c, a 17% discount to the recent five-day trading price. The company may accept oversubscriptions for the placement, which it is understood has cornerstone support from sophisticated and institutional investors. A further $3 million will be sought under a share purchase plan on the same terms. The capital raisings follow September's $4.4 million placement at 1.5c, also with Foster. Recent results from QPM's pilot plant in Perth, Western Australia, were reported as delivering excellent results for the creation of nickel-cobalt mixed hydroxide precipitate, with specifications said to be in line with leading MHP products. The company's TECH project aims to import nickel laterite from New Caledonia for conversion to MHP in Queensland using the Direct Nickel Process. MHP was described as the preferred nickel feed source for refining to nickel sulphate, and it now sells for around 85% of the LME nickel price, having increased from 65-75% in recent times. QPM is marketing itself to the battery chemicals market, and has non-binding agreements for the sale of a combined 16,000tpa of nickel products with LG Chem and Samsung over initial 3-5 year terms. A larger pilot program is to be conducted this year, with QPM keen to prove it can deliver a high-quality product. In February it committed to doubling the size of TECH to 1.2-1.5 million tonnes per annum compared to its earlier prefeasibility study. While the exact size will be determined by the DFS, the company is looking to produce up to 1500tpa of cobalt sulphate and 16,000tpa of nickel product, plus 4000tpa of 99.99% high purity alumina. It is also looking to develop opportunities for by-products, such as its high-grade, low impurity iron oxide material, with an agreement with local refiner Sun Metals Corporation. First production is targeted for 2023. QPM's shares have risen from 3.5c in January, and were last traded at 9.4c, valuing it at $88 million.