I was a large investor in Andromeda Metals from the early days and very familiar with the Kaolin/Halloysite story. (pre James Marsh days). I still hold a large parcel. Our Investment group has done a lot of DD on Zeotech and we have the view that it may be the next Andromeda Metals re share price appreciation. Remembering that few understood the Andromeda story early days - and now it is a $650 m market cap success story!
Both Halloysite and Zeolite are aluminosilicates. This sector has now hit the radar of investors as understanding of the multi vertical opportunities grow.
I think ZEO is very comparable to Andromeda re blue sky scope but with some key advantages...
1.The Abercorn Kaolin deposit is, from my understanding, very easy to process and has low impurities - and they have plenty of water, power and road access. Worth noting that in the case of Andromeda, they are after the Halloysite and have played down Kaolin. With ZEO, Kaolin isn't the main game either but it is a feeder for synthetic zeolite production. These are “parallel” players in the space both derived from "Kaolin".
2.The $ return per ton for Zeolite is considerable and the capex appears low. I speculate that the economics is likely to be more than comparable.
3.Andromeda has one source for its production, and that is in Sth Australia and its in the ground. They need the mining permit/off takes to progress. Worth noting that the Halloysite is “fixed” in that it occurs naturally and has what nature endows it. Synthetic Zeolite however, can be “modified” to capture and release a range of waste.
4.ZEO has Abercorn Kaolin but the big difference is that with the Zeolite technology IP, they can deploy in any number of sites where there is feedstock; especially large miners who have tailings/waste problems. No waiting for mining permits. The plants can go wherever there is a need/opportunity. A great story also re environmental management for companies who currently have an expensive waste problem to address.
5.Zeolite is equally applicable as a concrete additive and for carbon capture as Halloysite. Inherently, it has more flexibility for usage and verticals as it can be “tuned”.
6.The market/verticals are massive for both Andromeda and ZEO - so no shortage of demand. ZEO looks to have a price advantage in the sector.
7.Given the “tech” IP nature of Zeolite, I anticipate that they will be in production before Andromeda.
I do know that quite a few large Andromeda investors have been buying ZEO as they start to understand the sector and the potential. Worth doing DD on this one. BTW I still like Andromeda but on a market cap basis and flexibility of commerciality, ZEO looks very prospective.
