Australian Strategic Materials (ASM) will fully come into its own when it demerges from the Alkane Resources and lists on the Australian Securities Exchange, possibly next month.
The fully-owned subsidiary of Alkane Resources (ALK) was established in 2000 as a holding company for the Dubbo Project, located 25 kilometres south of Dubbo in New South Wales.
Now with the project construction-ready, ASM is looking to become its own differentiated company focused on the supply of critical minerals to the clean energy, transportation, heathcare, robotics and other high-growth industries.
Last month, Alkane Chairman Ian Gandel said that the pandemic-induced volatility of recent months has subsided enough to make the final preparations for the demerger.
“The turbulence experienced in global equity markets in March and April has abated to the extent that the Alkane board has decided the time is right to make the final preparations to demerge and list ASM in the coming months, subject to shareholder approval,” he explained.
If the demerger goes ahead, the company anticipates that ASM will list on the ASX in July 2020.
This would allow multi-commodity mining company Alkane to concentrate on gold exploration, development and production while ASM will focus on producing both metal oxides and clean metals, as its Managing Director David Woodall told The Market Herald.
“ASM is a polymetallic company, we will be producing oxide and metals of zirconium, rare earths, niobium and hafnium, so it’s a very different company with a lot of potential.”
All relevant state and federal permits have been secured, the deposit and surrounding land have been purchased and the process flow sheet has been established, making the project is construction-ready, pending financing.
“We are confident that we will be able to get the financing and offtake to build Dubbo and make ASM an alternate supplier of critical minerals in the world,” affirmed Mr Woodall in an interview with the Market Herald.
ASM will not only open-pit mine the Toongi Deposit, rich in zirconium, rare earths, niobium and hafnium, but also build a one million tonne per annum Dubbo mineral processing plant.
At present, ASM and South Korean joint venture partner, Zirconium Technology Corporation, are finalising the commissioning of a commercial pilot plant facility.
Additionally, Mr Woodall explained the business is progressing an optimisation study which is expected to be completed this year.
“The study is to look at reducing the capital and operating expenses in the project by incorporating a 1 million tonne front end which has flotation and a half-a-million back end for leaching and solvent extraction.”
At present, the world’s field of critical material producers is highly concentrated. For instance, approximately 75 per cent of the world’s zirconium products are produced in China and Brazil produces 85 per cent of the global niobium supply.
This has created supply chain vulnerability for critical minerals, many of which are required in growing industries, as evidenced by the U.S-China trade war.
With its listing around the corner and its Dubbo project construction-ready, ASM is preparing to capitalise on this lack of supply diversity and fully come into its own as an Australian supplier of critical minerals.