HIGH RISK OF TAKEOVER, page-62

Mergermarket reports (subscription service)- is a news service and interviewed JM. ADN currently fits in the profile of their reports. I applaud there due diligence and think ADN is a great buy as they are talking to global corporations in various industries and could possibly do JV's, corporations may get defensive stakes in ADN and or corporations may see ADN as a possible take over. I think James has gone to Europe to sign up a strategic partner. In what form it takes, who knows. What ever it is, the market cap should end up being multiples of where we are at now. DYOR.
Andromeda Metals vulnerable to takeover approach as it seeks strategic partner –MD

Andromeda Metals [ASX:ADN], an Australian emerging supplier of industrial minerals, is at “high risk” of a takeover as its Great White kaolin project in South Australia gets closer to production, Managing Director James Marsh said.
The company is in process of seeking a strategic partner for a joint venture (JV) partnership for the project, Marsh told this news service on the sidelines of Mines and Money Connect in London last week. It is speaking to global corporations in various industries, he said. “If they like us, they could choose to take us over”, Marsh said.
Andromeda Metals is vulnerable to a takeover as it has no major shareholder, the MD said. It has around 14,000 retail shareholders and its largest shareholder owns around 7%, he said. It would welcome an investor to take a defensive stake in the company, he said.
The company is talking to one of the largest cement companies in the world, one of the largest oil and gas companies in the world, battery and paint companies, and others, regarding a JV partnership, he said. Its minerals have a lot of downstream applications, and Andromeda is in discussions with many interested parties, he said.
Potential partners include players such as French Imerys [EPA:NK]; German BASF [ETR:BAS]; Georgia, US-headquartered KaMin; Belgian Sibelco; and German Quarzwerke, the MD said. Andromeda could for example do a 50:50 JV, he said.
Andromeda’s potential upside is several times higher than its current valuation, the MD said. In March 2021, the share traded at AUD 0.41 (USD 0.29), compared to around AUD 0.097 now, he pointed out. The current share price gives the company a market cap of AUD 301m (USD 214m).
The share price had an almost 50% drop last month when Andromeda published its definitive feasibility study (DFS) for the Great White project, the MD noted. The company itself thinks the DFS is positive, and its larger investors were happy, but retail investors misunderstood it, he said. The DFS builds on a different business model compared to the pre-feasibility study (PFS) from 2020 — the direct shipping ore (DSO) model was removed and the project will instead focus on higher quality products, which increased capex.
Kaolin is used in porcelain manufacturing, and also for many other applications including cosmetics, paint, rubber, plastic, and medicines, according to Andromeda’s website. The company’s deposits contain some of the highest purity kaolin ever discovered, and further they contain halloysite, a rare form of kaolin where the mineral naturally occurs as nanotubes. This can be used in a range of specialist applications, including hydrogen storage, water purification, carbon capture, agriculture, and so on, Marsh said. Andromeda’s Natural Nanotech division is developing commercial solutions for such high-tech applications based on material sourced from its halloysite-kaolin deposits.
In order to protect itself against a takeover, Andromeda is working on creating a corporate structure where its different businesses are separated, enabling it to do deals for separate entities, Marsh continued. Aside from the kaolin and halloysite projects, and the different tech applications, the company also owns two gold projects and a copper project, he pointed out.
The company does not have a defence advisor, but in theory it could use Taylor Collison, the MD said. It is working with Taylor Collison and Origin Capital Group on funding options for the Great White kaolin project, he said.
The initial capital cost for Great White amounts to AUD 93.8m (USD 65.8m), according to the company’s recently published DFS. Andromeda is talking to lenders, and will seek to have financing in place by the end of this year, Marsh said. It would prefer not to raise capital via a new share issue, he said.
Andromeda aims to break ground at Great White this year, and to get into production next year, the MD said. It expects to achieve 300,000 tonnes per annum (tpa) throughput in year one to five, and to ramp up to 600,000 tpa in years six to 28, according to the DFS