ADM's Great White Project has halloysite, which is kaolin of a...

ADM's Great White Project has halloysite, which is kaolin of a particular crystalline structure (nanotube) that attracts a premium price of over $700* a tonne CIF. WAK has the bog-standard platy kaolin worth circa $350 a tonne CIF, but of high quality for that type of kaolin. It has vast tonnages of it in the Wickepin resource. However, just because Product X attracts a higher price than Product Y, that does not mean Company X is better than Company Y. A large scale potato farmer is likely to be more profitable than the largest truffle farmer.

I do not follow ADN, but I gather it is in an early stage of its development, with mining approval for the Great White Project only recently received – hence today's rah-rah on the ADN subforum. In contrast, WAK has its first 200,000 MTA plant in operation, with a second plant expected at the end of calendar year 2023. WAK aims to sell to the middle-grade kaolin market, and its patented dry-blow degritting process is low cost, so it gets a middling price at low cost (similar to our metaphoric potato farmer).

The PR aspects of the two businesses are poles apart – WAK's taciturn management Announce as little as possible to meet mandatory requirements, whereas ADN makes more noise – perhaps because they need to prep the market for funding. Not many holders comment on this WAK subforum, whereas ADN posters are many, and in my view many are rather shallow. Today's Announcement has elicit about a hundred posts, which is probably more than WAK has received since it floated in late calendar year 2020.

WAK has one advantage relative to ADN – starting in FY24 there will be performance metrics to do the talking. Investing in WAK is a punt, so I am loath to recommend it until those metrics are there to be assessed. ADN is even more of an investment punt, because it is years away from being profitable, if it ever gets there. Trading ADN on the rah-rah stories is another matter, and it could be profitably traded.

The concentration of ownership in WAK bothers me a little, but not enough to exit my holding.