Metalsearch Limited (ASX: MSE) announced that it has entered into a binding agreement for the acquisition of 100% of the share capital in Abercorn Kaolin Pty Ltd, owner of Cynthia kaolinite discovery in Queensland, Australia.
MSE reported that the binding agreement consists of three EPM’s 26837, 26903, and 19081, for 128 km2 tenement area.
The company announced that 24 RC holes were drilled within the tenure, with all 24 holes intersecting kaolinite, the source of high quality HPA feedstock, and the kaolin mineralisation remains open in all directions.
The company reported that 99.99% Al2O3 (4N HPA) was already produced from Cynthia kaolin prospect feedstock. Metalsearch reported that the high grade HPA feedstock assay results include 33.71% Al2O3 (-10μm micron fraction).
MSE reported that highly experienced technical director John Goody will join MSE board.
The company said that the project concept is for a moderate size open pit mine and process onsite to produce HPA and Alum and / or potential direct shipping ore (DSO) opportunities.
Cynthia Kaolinite deposit
Abercorn Kaolin Pty Ltd owns Cynthia Kaolinite deposit, a large-scale kaolinite prospect which has the potential to be developed into a world leading Abercorn High Purity Alumina (HPA) Project in Queensland, Australia.
There is a main sealed highway adjacent to project and mains power onsite. The project is also located close to two deep water ports.
The Cynthia Kaolinite deposit comprises of 3 contiguous Exploration Permits Mineral (EPM) for a total of 38 sub-blocks, an area of 128km2. EPM 26837 comprises of 33 sub-blocks, EPM 26903 of 4 sub-blocks, and EPM 19081 of one sub-block.
The company said that 24 Reverse Circulation (RC) drill holes have been drilled within the tenure, over an area of approximately 5.5km N-S and 3.5km E-W (19.25km²), defining large scale resource potential from surface.
MSE said that all 24 holes intersected kaolinite, the source of high quality HPA feedstock, and the kaolin mineralisation remains open in all directions.
The deposit is thought to have a North – South extent in excess of 20km and a variable East – West extent of between 1km and 10km. The vertical extent of the kaolin as shown by drilling is between 3m and 35m thick, with little to no overburden, averaging only 1.5m thickness.
High quality orebody
The company said that the kaolin mineralisation previously drilled at the Cynthia prospect offers the capacity to produce HPA and marketable volumes of higher-grade feedstock.
The assays completed to date indicate the -10μm fraction has consistently graded at >33% Al2O3, representing circa 20% of raw ore mass. 99.99% Al2O3 (4N HPA) was already produced from Cynthia kaolin prospect feedstock.
Terms of the acquisition of Abercorn Kaolin Pty Ltd
MSE announced that it has signed a binding term sheet with the owners of Abercorn to purchase 100% of the shares in Abercorn, making its way into the HPA space.
The terms for the Acquisition states that MSE would initially make a payment of $50,000 as a non-refundable deposit to Abercorn.
At completion, MSE would make a payment of $300,000 as reimbursement for past expenditures, as well as issue 235,000,000 ordinary fully paid shares in MSE at a deemed issue price of $0.006 having a total value equivalent to $1.4 million. This would be done based on the achievement of two performance-related milestones.
The completion of the Acquisition is subject to and conditional upon MSE completing a capital raising of $2.0 million, as well upon the completion of a scoping study based on an open pit mine and onsite processing plant to produce HPA and aluminium sulphate and facilitate potential direct shipping ore opportunities.
The rapidly expanding HPA market
The company reported that the HPA market is experiencing significant growth.
HPA is used across a range of high-tech markets such as lithium-ion batteries, sapphire glass, smartphones, tablets, televisions, watches, optical lens, bio-medical devices, light-emitting diodes (LED) lights and electronic circuitry markets.
HPA demand is also set to escalate and outstrip production due to forecast global electric vehicle (EV) adoption.
Commercial grade Aluminium Sulphate (ALUM) used in water purification is produced from Cynthia kaolinite.
New board member
Metalsearch reported that highly experienced technical director John Goody, who is one of the founding director of Aeon Metals Ltd, will join MSE board.
MSE reported that it will leverage his deep understanding of the project and product(s) to help deliver on the potential Abercorn presents.
Metalsearch said that it would immediately undertake extensional RC drilling to further define the size and scale of the resource.
MSE reported that the exploration plans to advance this project are currently being finalised. The company noted that the focus of follow up work will be to drill out sufficient kaolin mineralisation to support an economic HPA project.
MSE said that the goal of the next phase of drilling will be to define an Inferred Mineral Resource to JORC (2012)
The company said that there could potentially even be a direct shipping ore (DSO) operation given the proximity to two existing ports.