Case Study - Andromeda Metals (ASX: ADN)

Andromeda Metals Limited have developed a simple and cost-effective development strategy and possess a market opportunity for a wide gap in high-grade Chinese kaolin supply.

PAC Partners has initiated research coverage on ASX-listed industrial minerals company, Andromeda Metals Limited (ASX: ADN), and was recently Lead Manager for a $3.95m placement.

Key Drivers for Andromeda Metals:

Our key drivers behind our positive view on Andromeda Metals include:

• ADN has a simple and cost-effective development strategy which was validated by the scoping study released in September 2019‍
• Mine closures in China haveled to a gap in supply, and ADN is well-positioned to meet demand
• The high-grade halloysite kaolin deposit at Poochera is higher quality than ADN’s immediate competitors
• Highly-regarded Managing Director James Marsh has been involved in kaolin for over 30 years and is an expert in the industry
• ADN has a world-class resource with a high halloysite content and brightness. The project, as confirmed by the scoping study, has long mine life and extensive reserves, indicating high economic value.
• ADN’s DSO start-up minimises capex with a fast ramp-up to production. This will allow ADN to self-fund the dry processing plant without seeking further equity raisings.

LINK TO Andromeda Metals’ Scoping Study, released 30th September, 2019

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Recent Capital Structure Changes - $3.95m Placement (16th October 2019) – Lead Manager: PAC Partners:

PAC Partners was Lead Manager for $3.95m placement through the issue of 84,196m ordinary shares at an issue price of $0.047 per share.

The $3.95m placement will allow ADN to proceed with its next milestones, as outlined in ASX announcement (16/10/19) including:

• Pre-Feasibility Study (to be completed by Q2 2019)
• A Carey’s Well resource update
• Exploration for new high-purity halloysite deposits
• An update of the historical Mount Hope resource to JORC 2012 Code
• Halloysite nanotechnology research and halloysite purification trials
• To advance binding offtake agreements
• Complete all PFS studies and permitting approvals

Managing Director James Marsh commented, “These funds now allow the Company to move forward as quickly as possible with the projected commercialization of the current Poochera halloysite-kaolin resource in addition to defining new ones and driving exciting new blue-sky opportunities”.

LINK TO Andromeda Metals’ Investor Presentation, October 2019

Feel free to contact Paul Jensz on 03 9114 7444 to discuss further and be added for future distribution.

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