Recently we've had this very tantalizing and perhaps significant snippet delivered into our brain boxes............"commenced discussions on a mutual business arrangement for the Poochera Halloysite‐Kaolin Project including a collaborative strategy for the production of high purity alumina in China"..............
We know why 'they' want Carey's Well Halloysite-Kaolin...........
- 'Single pass' to 4N purification confirmed
- Higher mass yields to Al in compassion to other kaolin prospects
- Cost savings and production kinetics ensuring more rapid processing and in the end higher margins
But what shape might such a collaboration take is the million dollar (or should I say hundred million dollar) question..........?
We know they have mentioned various parties but could this be the 'LG battery metals' connection they have alluded to previously......?
Regardless of who it is...........how might this look in terms of a 'signed deal' and what type of yearly production metric are we looking at I do wonder?
They have two main options on a 'collaboration' to produce HPA I figure.......
- Toll production (unlikely but not impossible if funded via DSO and semi-processed products into ceramics industry).
- Profit or 'production' sharing models (more likely imo for various reasons, but mainly 'easier on the wallet initially').
Consider if you will a modest 5000 ton per annum 4N HPA production target out of China via third party processing.
From either side of the coin that would be an exceptional outcome for ADN when we consider 4N HPA is selling for approx $25,000 per ton these days.
5000 tons x $25,000 = potential gross yearly revenue of $125mill (assuming they sell the full production run at $25K per of course).
Which road do they go down? Do we have any comparable companies to look at for pitfalls/upside here?
To me a production sharing scenario seems more plausible and more likely from the language used. But Toll treatment would see 100% of anything produced go straight to ADN (so to speak) after costs (which could well be considerable I'd imagine) but margins should be better than most imo.
ADN would then get 75% via the JV agreement with MEP.
Plenty of unknowns.......but all very interesting stuff to muse over nonetheless imo.
My outlined scenario is all pure speculation BTW and HPA production is only at the discussion stage here, but we do know they're looking seriously into HPA production via third party processing. It's just how they go about it I guess.......and that's what I'd like others thoughts/ideas on.
Or am I moving 'too early' into the HPA 'speculation arena' here i.e no point wondering as we just don't know enough yet.....?
I'm sure everyone will have a view of some sort..............so fire away.
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