Resources Rising Stars: Borate and lithium play arrives at ASX
Barry Fitzgerald
No one buys Rio Tinto for its borate production at Boron in the Mojave desert, even if it has been a steady and nice earner ever since Rio’s acquisition of the historic business in 1967.
But a new investment vehicle for exposure to what can be a high-margin business plugged into global type GDP-growth, with growth upside from applications beyond its traditional uses, will soon arrive on the ASX. We’re talking about American Pacific Borate & Lithium. APBL has closed off its $15m float, which is said to have received $30m in applications. It is a couple of weeks away from listing and as the full name suggests, lithium is part of the story.
APBL has picked up the advanced Fort Caddy borate project in California’s Hector evaporite basin, about 120km from Rio’s hard-rock Boron operation and close to Elementis Specialties Inc’s hectorite lithium clay mine.
Fort Caddy is advanced because previous owners have spent about $US50m on early stage assessment, getting to a point of trialling a pilot borate solution mining operation which successfully produced saleable boric acid which if it were being sold today, would fetch $US800-$US1000 a tonne.
While it could be that those overs in applications to the float where pushed along by the lithium leg, it has to be said that there is some excitement from what looks to be a fairly compelling borate proposition. It’s the nature of the borate deposit that lithium is part of the package, with known high-grade zones.
APBL’s forward program includes punching half a dozen holes to test the lithium upside soon in its life as a listed company. But first up the plan is to work up a JORC 2012 compliant borate resource and plug that into a scoping study before the end of the year, leading in to a feasibility study next year.
APBL’s executive is populated by some familiar names, including former Highfield Resources (HFR) managing director Anthony Hall, the guy that took the now $300m Highfield into the crop nutrient potash in Spain.
There are a lot of similarities between borate and potash. Both are controlled by duopolies, and both have a crop nutrient leg (boron is much more – liquid crystal displays, fibreglass, ceramics and detergents).
Rounding off that line of thought, APBL’s managing director is Michael Schlumpberger, a mining engineer who held senior positions with Canada’s potash king Potash Corp, as well as Highfield. It all makes for an interesting mix for a company which is valued at $34m at the issue price.
