ZEO – Market Cap $100 m ST Strong Buy
Have been a large SH of Andromeda since the very early days. Originally, the attraction to be an investor in Andromeda was Halloysite, which people really didn’t understand re its potential and uniqueness until relatively recently – which is now reflected by the $668 m market cap. Credit to James Marsh for the excellent work done there!
As many know, Halloysite is an Aluminosilicate – as is HPA (High Purity Alumina) and Zeolite. Aluminosilicate is the category/sector of interest which is now getting like gold, copper etc… where people better understand the unique advantage and commerciality of this material. This was a largely unknown area for investors – but the penny has now dropped for Halloysite.
As part of an investment group that has some large Andromeda early investors in it, many of us think Zeolite (particularly synthetic) is the next big opportunity.
The market size for Zeolite is circa $2 Billion USD for Type A Zeolites alone – total Zeolite Market ie A, X, Y etc in excess of $3.5 Billion USD (Halloysite: $30 Million USD and HPA: $1.3 Billion USD). Plenty of existing vertical markets.
Zeolite is like a three dimensional porous honeycomb that acts like a sponge and a magnet soaking up microscopic particles and trapping them inside. It can be used to adsorb molecules or ions. Used in carbon capture, detergents, water purification, pharma, food production, soil conditioning, chemistry, oxygen purification, concrete additives among others.
Synthetic Zeolite can be produced from Kaolin as feedstock, as can Halloysite, but isn’t reliant on it as it can also be produced from other materials such as mining tailings re waste remediation – so can be sourced from anywhere in the world where there is feedstock. No mining permits needed.
Is very flexible across verticals as it can be “tuned” to capture and release a range of targeted ions or molecules (just like an electron magnet) for example - heavy metals (lead etc), gases, CO2 etc… so it isn’t limited by how it comes out of the ground. It is also recyclable.
It sells for high prices, for example, $2,850/t up to $4500/t (Type A molecular sieve grade ie 3A, 4A and 5A beads and pellets )
Zeotech (ZEO) is very interesting here. Low market cap and has the large scale kaolin resource Abercorn project in QLD (with maiden JORC) – close to water, power and transport. Easy to process and low impurities.
They also own the IP for synthetic zeolite processing that could position them as the/or one of the lowest cost producers globally with very low anticipated capex plant and production costs. Also strong partners with Uni of Queensland. A great appeal to large miners for environmental responsibilities and turning a cost into a profit centre.
For Carbon Capture, Zeolites are actually superior to Halloysite. Desk research indications: Halloysite = .67 CO2 mmol/g. Zeolite = 2.3 – 3.1 CO2 mmol/g. It is equally applicable as a concrete additive as Halloysite.
ZEO will be on Share cafe this Friday with Sylvia Tulloch presenting.
Rego - https://t.co/YesbjroWVx?amp=1
