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Corporate Spotlight

Pure Alumina is focused on becoming the premier supplier of High Purity Alumina through the strengths of our relationships and the quality of our product.
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QUARTERLY

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Pure Alumina makes progress on acquisition of Polar Sapphire to facilitate becoming a producer of premium quality low cost high purity alumina

ASX Announcement 30 July 2019 


Quarterly Highlights 

  • Pure Alumina is currently undertaking a $30m capital raise to fund the Polar acquisition and to build a 1,000tpa HPA plant. 
  • A global investor roadshow is at an advanced stage with site visits to Polar’s HPA pilot plant, investor due diligence and follow up meetings currently occurring. 
  • Due diligence for the Polar transaction is essentially complete. 
  • The timeline to complete the Polar transaction has been extended to 30 September 2019 with Pure Alumina no longer retaining exclusive rights to the acquisition of Polar Sapphire. 
  • Discussions are underway with the preferred bidder for the Hill End gold project to secure a binding purchase agreement. 
  • Pure Alumina successfully completed a share purchase plan and top up placement raising $1.75 million


During the June quarter Pure Alumina focussed efforts on satisfying the conditions necessary to acquire Polar Sapphire Limited (Polar) from private equity interests for C$25.75m in Pure Alumina shares and cash as outlined in the ASX announcement of 21 March 2019.


Polar has perfected its proprietary technology to produce premium 99.999% (5N) high purity alumina (HPA) at its Toronto pilot plant and is seeking capital to commercialise its process. Acquiring Polar and raising the necessary capital will enable Pure Alumina to fast track its plans to construct a 1,000 tpa plant to produce HPA within 12 months at a competitively low capital cost. Assuming completion of the acquisition, Pure Alumina aims to rapidly expand HPA production to 5,000tpa within three years to capture exceptional growth in HPA demand for use in LED lighting, coatings on lithium battery separators for electric vehicles and other uses.


Due diligence for the transaction is essentially complete. Pure Alumina has completed its due diligence of Polar and identified no material legal, financial, commercial or technical issues. Polar has similarly undertaken due diligence of Pure Alumina and has not informed the Company of any substantive issues. 


The $30m capital raise was the major activity during the quarter. After agreeing mandates with Patersons and Fraser McKenzie Merchant Capital, a global roadshow to brief investors in Europe, North America and Australia was undertaken. There was strong interest and positive feedback. Currently, follow up meetings, site visits by investors to Polar’s HPA pilot plant and investor due diligence is underway. The capital raise has been extended to capture those who were absent during the holiday periods in the northern hemisphere and Australia.


Pure Alumina is preparing a notice of meeting and independent expert report on the transaction to enable shareholders to consider and vote on the transaction once the capital raise and other conditions precedent are satisfied. The notice of meeting will be sent to shareholders once finalised and approved by the ASX.


Pure Alumina and Polar agreed to extend their acquisition agreement to 30 September 2019 to allow sufficient time to complete the transaction. However, PUA no longer has exclusivity for the acquisition of Polar (see ASX Release of 24 July 2019).


On 23 April 2019, Pure Alumina announced a Share Purchase Plan (SPP) and optional top up placement to raise up to $1.75 million. As announced on 30 May and 12 June 2019 the SPP and top up placement successfully raised $1,753,180 at the price of $0.0346 per share which was determined by applying a 20% discount to the volume-weighted average price (VWAP) of fully paid ordinary shares in the capital of the Company over the five trading days, on which the shares traded, prior to 29 May 2019.


Pure Alumina appreciates the support of its shareholders in delivering the successful SPP and top up placement


Click here to view the full announcement

INVESTOR PRESENTATION

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STRONG SALES

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Pure Alumina target, Polar Sapphire, receives strong sales demand from outstanding HPA test results

ASX Announcement 11 April 2019 


Numerous sales orders received for 5N HPA produced by Polar Sapphire 


Pure Alumina Limited (ASX: PUA) is pleased to announce that Polar Sapphire, the Canadian company which is currently being acquired by Pure Alumina (see ASX release dated March 21, 2019), has received a number of orders for its top-quality 5N high purity alumina (HPA). 


The sales orders were received from a number of global sapphire producers as part of the final stage of qualifying Polar’s product or from Polar’s existing, qualified customers.


The customers represent a range of end-users, including LED lighting and optical lense manufacturers, all of which value the high purity and physical properties offered by Polar’s 5N HPA.


One customer which is in the final stages of qualifying Polar's HPA product has sent for testing a sapphire boule grown with Polar’s 5N HPA.


The test, undertaken by EAG Laboratories (shown in the attached appendix) show an extremely high-purity (6N) sapphire was achieved. The 6N sapphire will allow the customer to produce a higher-yielding boule than would be possible if it used alternative sources of HPA.


The continued demand and ongoing positive results from customers’ qualification processes provide a very high degree of confidence that production from Polar Sapphire’s planned commercial HPA plant will be in high demand.


Pure Alumina continues to see strong growth in the sapphire market from LED’s and semiconductor wafers to optical markets and also in battery separator markets. 


Upon successful completion of the Polar Sapphire acquisition, the planned construction of the commercial-scale production facility will see Pure Alumina become an HPA producer within 12 months capable of supplying the portfolio of customers which will have already qualified its HPA.


This will leave Pure Alumina well-positioned to supply the growing HPA market, with an initial target of 5,000tpa of production capacity and the ability to expand very quickly to meet future increases in demand.


Click here to view the full announcement 

INTERVIEW WITH MANAGING DIRECTOR

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Interview with Pure Alumina Managing Director Martin McFarlane

ASX Announcement 1 April 2019 


The following is an Inside Briefing interview with Pure Alumina Managing Director Martin McFarlane


In this interview, Martin McFarlane discusses Pure Alumina’s agreement to acquire Canadian high purity alumina producer Polar Sapphire. Key points in this interview include: 


  • Pure Alumina’s agreement to acquire Polar Sapphire provides a low cost way to fast track the Company’s strategy to become the world’s premier supplier of high purity alumina (HPA) 
  • Polar Sapphire’s patented process produces the highest commercial-grade HPA, known as 5N HPA, at its Toronto pilot plant. 5N HPA commands a premium in the market 
  • On completion of the Polar acquisition, Pure Alumina will move to rapidly expand HPA production capacity to 1,000tpa within a year and 5,000 tpa in 3 years to capitalise on the exceptional growth forecast for HPA stemming from its use in LED lighting and lithium batteries for electric vehicles


Inside Briefing: Pure Alumina has agreed to acquire Canadian company Polar Sapphire. What attracted Pure Alumina to this deal? 


Martin McFarlane: The fundamentals of the HPA market are very strong, with its exceptional growth arising from the global adoption of LED lighting and HPA’s use as a coating on lithium battery separators for electric vehicles. The Polar acquisition enables Pure Alumina to be in commercial HPA production in less than a year. This is several years earlier than previously planned and at a substantially lower capital cost. 


Inside Briefing: Under the terms of the deal, Pure Alumina will pay C$25.7m (A$27.1m) for the acquisition. How will your Company fund this? Will funding be difficult given that Pure Alumina currently has a market capitalisation of $7m? 


Martin McFarlane: The consideration for Polar Sapphire consists of C$13.75m in Pure Alumina shares and C$12m in cash. Pure Alumina is seeking to raise A$30m in a combination of debt and equity. We believe that with the Company expected to be in production and cashflow within a year, it can support a robust debt capacity. Raising money is nearly always a challenge, however the amount we need to raise is considerably smaller than some other listed HPA aspirants, which will require significantly more to build their commercial scale operations.


Inside Briefing: Pure Alumina already had plans to establish itself as an HPA producer using its extensive Yendon kaolin resources as a feed stock? Why has it switched its focus to Polar Sapphire? 


Martin McFarlane: The Yendon pre-feasibility study found that Pure Alumina’s plan to use its kaolin to produce HPA would deliver robust financial and technical outcomes. However, some investors had concerns about the size of the initial capex and the timeframe of 3+ years to production. Acquiring Polar addresses these market concerns, with total cost to commercial production reduced by more than 90%, including acquisition costs, and the timeline to commercial production reduced to less than a year. The blue sky is that our processes are compatible and our plan is to integrate them over the next three years, once we have initiated and expanded HPA production and revenue, so that eventually we plan to use kaolin instead of aluminium as the feed material, further reducing the already low forecast operating costs


Inside Briefing: If Polar Sapphire’s process is so good, why are its owners selling the company? 


Martin McFarlane: Polar Sapphire’s major shareholders are venture capital funds whose mandates are limited to start-ups. As Polar is now entering commercial operation, the VC funds are looking to set up the funding and development of the project in the best way possible for future success.


Inside Briefing: The Polar Sapphire team obviously has the knowledge and expertise when it comes to this world-leading technology. What role will they play in the Company once the acquisition is completed? 


Martin McFarlane: A key part of the acquisition is that all the Polar team will be retained to construct and operate the commercial HPA facility. I am delighted to say that as part of this, Polar MD Scott Nichol will take up the Managing Director’s role to lead Pure Alumina once the acquisition is complete.


Inside Briefing: What is Polar Sapphire’s current HPA production capacity? How does Pure Alumina plan to expand that capacity to capitalise on the growing demand for HPA? 


Martin McFarlane: Polar’s pilot plant has a capacity of approximately 150 tonnes per annum of HPA. But as it is a pilot plant, it is used for both R&D and HPA production. Once the acquisition is completed, we plan to build a new 1000tpa HPA facility in Toronto. This is expected to cost ~US$12m and be commissioned within a year. New HPA capacity will then be added in line with the growth in sales. The Polar patented process is modular so expansions are all stand alone and won’t impact existing production.


Inside Briefing: What is HPA and what is it used for? 


Martin McFarlane: HPA is an abbreviation of high purity alumina or aluminium oxide. High purity means its purity exceeds 99.9% for 3N, 99.99% for 4N and 99.999% for 5N, which is typically the grade Polar makes. As the purity increases, so does the price in the market. By comparison, smelter grade alumina, used to make aluminium, is typically 98.5% purity.


Today, more than 80% of HPA is used to make synthetic sapphire, which is a diamond-like substance that is very hard, chemically inert and stable at high temperatures. Synthetic sapphire is used in many products, the biggest of which is LED lighting. But it is also used in scratch-proof watch faces and mobile camera lenses, semi-conductor tools and optical equipment. The fastest growing use of HPA is as a coating on lithium battery separators to reduce the risk of them overheating and catching fire. Within a few years, this is expected to be the largest use of HPA as electric vehicles replace combustion engines and batteries for energy storage roll out. 


Click here to view the full announcement 

DIRECTORS

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Board of Directors

Tom Eadie
Chairman

Mr Eadie is a geologist/geophysicist with extensive experience across many commodities and as a Company Director. He is currently a Non?Executive Director of ASX listed companies Strandline Resources, Alderan Resources and New Century Resources. Mr Eadie was the founding Chairman of Syrah Resources (ASX: SYR). During his time in this role, Syrah discovered and began the development of the world?class Balama graphite project in Mozambique. Prior to this, Mr Eadie was Executive General Manager of Exploration and Technology at Pasminco Limited, at the time the largest zinc producer in the world. This came after technical and later management responsibilities at Cominco and Aberfoyle in the 1980s.  

Martin McFarlane, B.Eng., B.Bus
Managing Director 

Mr McFarlane has more than 25 years resources experience with major resource companies including Minerals and Metals Group, OZ Minerals Limited, Zinifex Limited, Pasminco Limited and Conzinc Rio Tinto of Australia including successfully holding senior roles for the past 13 years either as CEO / President of the company or being responsible for major business units reporting directly to the CEO. 

David Leavy, B.Ec., M. App. Fin.
Finance Director

Mr Leavy has over 25 years of experience in the banking and mining industries covering a wide range of commodities. He has significant experience in debt and equity markets, physical and derivative commodity markets, specifically in gold, bauxite, iron ore, base metals, oil and LNG. Recent roles have included CFO of several mining companies undergoing project development, requiring implementation of appropriate business processes, government negotiations, team establishment, logistics etc. in Australia, Ghana, Guinea and Sierra Leone. Prior to this Mr Leavy held a number of roles at Westpac through financial markets (FX and commodity derivatives), project finance, relationship management, credit analysis and capital solutions. A significant focus for these roles was on the Mining and Oil & Gas sectors. 

Graham Charles Reveleigh, M.Sc., MAusIMM, CPMan, MCIMM
Non-executive Director

Mr Reveleigh has wide experience in the mining industry, covering exploration, development, construction and mine operations including Mine Manager at Noble’s Nob, where he ran the operations for seven years. He has worked as a consultant on numerous projects both in Australia and overseas such as at Hill End in New South Wales, Red Dome in Queensland and as Project Manager at the Moline Gold Mine in the Northern Territory, at Gold Ridge in the Solomon Islands and as part of the Kennecott team at Lihir and in other assignments in the Philippines, New Caledonia, Siberia and most States in Australia. Mr Reveleigh was the Site Manager for Nugget Resources Inc at Hill End NSW since the commencement of the project, and for four years was Managing Director of the Company. 

Robert Boston
Non-executive Director

Mr Boston is an experienced resources corporate executive having worked in legal, business development, strategy, marketing and commercial positions with BHP Billiton (Nickel West), Rio Tinto Exploration and Poseidon Nickel Limited. Robert holds a law degree having worked for national law firms Freehills and Mallesons Stephen Jaques. Robert has multi commodity expertise in particular exploration, early stage resource development, M&A, joint ventures and marketing. Robert also holds a Bachelor of Commerce, Bachelor of Laws, a Post Graduate Diploma in Applied Finance (FINSIA), and a Diploma of Management. Robert is admitted to the Supreme Court of Western Australia and High Court of Australia.

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