Finalises Kaolin Mining Rights Agreement with Dana
Perth, Oct 30, 2015 AEST (ABN Newswire) - Altech Chemicals Limited (Altech/the Company) (
ASX:ATC) advises that it has reached agreement with Dana Shipping and Trading S.A. (Dana) to grant Dana the exclusive right to mine up to 10Mt of kaolin from the Company's Meckering kaolin deposit (Meckering Deposit). The Meckering Deposit covers approximately 184km2 in area and contains indicated and inferred kaolin mineral resources estimated at 64Mt @ 83.4% brightness JORC (2004).
Highlights
- Altech grants Dana the exclusive right to mine up to 10Mt of kaolin for a $1m cash payment
- Dana may increase its kaolin mining right to 30Mt by paying an additional $2m
- Altech will also receive a 2% gross sales royalty on all bulk kaolin sales
- Current kaolin resources at Meckering are estimated at 65Mt
- Altech's HPA project requires only 4Mt of kaolin for a 100 year project life
Under the terms of the kaolin mineral rights agreement, Dana will pay Altech $1 million cash for the right to mine 10Mt of kaolin (First Transaction) upon either the grant of mining lease ML70/1334 or the grant of any alternate mining lease that provides Dana with mining access to kaolin within an area of the exploration lease containing the Meckering Deposit (EL70/3923). If the conditions of the First Transaction are not satisfied by the end date (within 9 months of the date of the agreement), the parties have agreed to discuss the grant of the same kaolin mining rights to Dana on the other kaolin tenements held by the Company, such as its Kerrigan kaolin project (E70/4737 and E70/4718).
Subject to the completion of the First Transaction, Altech has granted Dana an option whereby Dana has the right to increase its kaolin mining right to 30 million tonnes, by paying a further $2 million cash to Altech.
Based on its recently completed bankable feasibility study for the development of a 4,000tpa high purity alumina (HPA) plant (HPA Project), Altech will only require approximately 4Mt of kaolin to support a 100 year project life.
The grant of the mining rights to Dana will not constrain the Company's HPA Project and under the agreement with Dana, Altech's right to mine kaolin for its project takes priority over the kaolin mining rights granted to Dana and reciprocal non-compete obligations apply to both Dana and Altech. The bulk kaolin that Dana intends to produce from its mining operations is predominantly used in the ceramics, paper, rubber and paint industries.
Also, under the agreement Altech will receive a 2% gross sales royalty on all bulk kaolin sales.
About Dana
Dana is an Athens-based global shipping company with a focus on dry cargo operations, working with a diversified suite of dry bulk commodities such as coal, iron ore, grains and minor bulks across all dry bulk vessel sizes.
Commenting on the kaolin mining rights agreement with Altech, Dana CEO Mr Patrick Hodgins said "the recently completed scoping study for the mining and processing of bulk kaolin from the Meckering Deposit and associated test-work has delivered promising results and confirms the potential for the project to provide bulk kaolin for export markets, as a bulk commodity this kaolin project it is a good fit with our established shipping business".
Altech managing director Iggy Tan said "Altech remains focused on finalising the detailed design and securing funding for the construction of its HPA Project. As our HPA Project requires only 4Mt of kaolin for a 100 year life, securing additional value for our shareholders from the kaolin resources at Meckering via this mining rights agreement with Dana is a great outcome".
"If Dana exercises the option to increase its mining rights to 30 Mt, Altech will benefit from a total cash injection of $3 million, without dilution to current shareholders."
About Altech Batteries Ltd
Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.
The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.
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