Hi Guys,Thought I would share my notes on MSE and why I think...

Hi Guys,

Thought I would share my notes on MSE and why I think this company has huge potential in the coming months:

Corporate Snapshot:

SOI: 1,176,551,184

Share Price: 1c

Debt: Nil

Market Cap: 11.76 mill

Cash (end of March Qtr): 2.34 mill

EV: 9.42 mill

Additional Info:

Options (exercisable at 1.5c): 20,00,000

Performance Rights: 200,000,000

Mining Projects

The Abercorn Project - 100% ownership

The Abercorn Project is a large-scale kaolin prospect, located in central Queensland. The total number of holes drilled into the project is now 86 for a total of 3,172m.

• 86 RC holes drilled - Kaolinite intersected in every hole

• Large scale mineralised system from surface

• Resource remains open in all directions

• High Grade AL2O3 (HPA) assay results include 33.71% Al2O3

• Low cost operation - straight forward open cut mining

• Little to no overburden, Low impurities

• Main sealed highway adjacent to the deposit

• Mains power on site / major power transmission line within 5km of site

• Large water supply nearby and within EPM

• Close to two deep water ports The Abercorn Project is situated approximately 135km south of the deep-water port of Gladstone and 125km west of the deep-water port of Bundaberg in central Queensland.

Many of the drill holes analysed to date have surficial zones of up to 27m thickness grading in excess of 30% Al2O3. All holes have zones that average in excess of 27% Al2O3. The weighted average of all holes reported to date is currently 29.7% Al2O3.

IMO there is huge potential to further drill out the project and find further huge grade/thick intercepts. From my understanding only a small proportion of the prospective deposit has been drilled to date… see below:

As alluded to in the recently appointed COO’s performance milestones, the company has clear intentions to monetise this asset at massive scale. From my calcs (even without the prospect of halloysite being present or further purification/ value adding of material) 1,000,000 tonnes/year translates to approx $300 million AUD/year at current pricing.


Based on the information available, the company’s maiden resource should be announced within the next few weeks, and the company will be sending samples off for Halloysite testing.

Synthetic Zeolite Focus

As per the 7th April announcement, MSE entered into an agreement with UniQuest whereby it secured the global exclusive license for synthesizing zeolites. Uniquest has now filed under the Patent Cooperation Treaty to protect this technology, and can subsequently seek patent protection in over 150 countries.

Looking through UniQuests website it appears these guys knock around with some seriously large players… their startup companies have raised in excess of 700 million dollars and they have collaborations with Johnson & Johnson, AstraZeneca, and some larger ASX companies such as Envirosuite (MC circa 150 million). IMO not the worst name to have on our register, holding 7.85% of MSE at present.

The UQ synthetic zeolite processing technology has the potential to significantly reduce the cost of manufacturing synthetic zeolites. UQ has demonstrated the following under lab scale conditions for the formation of certain synthetic zeolites: - Up to 70% reduction in energy in the thermal activation stage; - Up to 80% reduction in production time in subsequent zeolite precipitation steps.The IP has been exclusively licensed by MSE from UniQuest, and the company also has the ability under the agreement to sublicense the technology.

I’ve got to be honest, up until a few weeks ago I had never even heard of synthetic zeolites, but looking into the opportunity I am truly shocked by the market size and its importance in the water tech/treatment space.

UQ’s technology has produced type A, X and ZSM comprises circa 4.7 billion USD market (7 Billion dollar AUD market).

Given the market response to water technology companies of late, I believe MSE has enormous potential to re-rate on the back of moving the technology forward, in line with other current ASX water treatment companies.

What next?

From the recent company preso/ media releases it looks like there is much expected news flow which may provide more visibility to the company’s activities and its future.

Other than an upcoming maiden resource due anytime in the next few weeks, halloysite testing on the current drilled material, further drill program planned/ announced, I am most excited by the upcoming steps being taken by the company to take the synthetic zeolite technology forward .

I am expecting the company to move quickly to establish a pilot plant to further validate the recently acquired tech, file patents in multiple jurisdictions, sign partnerships with potential feedstock suppliers, synthetic zeolite producers and end users. Obviously nothing has been signed, but IMO enormous value will be added if MSE JV’s with a “major mining company” to reprocess their tail streams amenable to the technology. As alluded to above, the company is also progressing engagement with “Mainland China synthetic zeolite manufacturers” for research and early adoption (see above). Who knows what these early engagements will be worth, but certainly a step in the right direction.

The company’s performance milestones (below) also gives us a clue as to where they are wanting to take this technology. As discussed, the synthetic zeolite market is worth approx 8.3 billion AUD/ year (5.58B USD). One would imagine a sublicense/ production royalty from a major producer to have significant recurring revenue attached.

Additional Info

HPA Production

The company has lodged a further patent application re a HPA production process:

Given the R+D agreement between MSE and UQ’s school of chemical engineering, and the many uses for kaolin feedstock, I expect the above will be the first of many technologies developed through this partnership.

Kraapian Gold Project

The company still holds 100% interest of 3 tenements in the Botswanan Kraapian Greenstone Belt - Total of 1,896km2

Although results from their most recent drill program were disappointing, in this gold market perhaps there is potential for divestment in the coming months.

As always GLTA Holders