Big raising sets QPM up to take battery metals refinery forward
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Queensland Pacific Metals is fully funded to complete a definitive feasibility study on the new-age battery metals refinery it is planning for northern Queensland after completing a $15 million share placement.
QPM (ASX: QPM) announced on Monday it had completed the raising at a price of $0.08 a share through Foster Stockbroking, with “demand significantly in excess of funds sought”. A Share Purchase Plan is also being offered to satisfy demand from eligible shareholders to raise up to an additional $3 million.
The funds raised will go towards the DFS on the company’s Townsville Energy Chemicals Hub (TECH), which is expected to import nickel laterite ore from New Caledonia to produce nickel sulphate, cobalt sulphate and high purity alumina for sale to lithium-ion battery manufacturers.
“We are delighted to raise sufficient funding to complete the DFS for the TECH Project,” QPM chief executive Stephen Grocott said. “The DFS allows the QPM team to finalise the project design, engineering and capital estimate that will will allow us to procure financing for the construction.”
The DFS will build on the updated pre-feasibility study delivered in April last year, which showed a post-tax NPV of $1.47 billion and a post-tax IRR of 30.7% for a project producing 26,000t of nickel sulfate (~6,000t of contained nickel), 3,097t of cobalt sulfate (~650t of contained cobalt) and 4,007t of 4N HPA annually.
In February, QPM announced it would increase the scale of the project by at least twice that contemplated in the PFS, primarily due to demand already indicated by potential offtakers.
Over the second half of last year, the company signed MoUs with two of the world’s largest lithium-ion battery manufacturers, LG Chem and Samsung SDI, for a combined 16,000t of contained nickel and 1,000t of contained cobalt.
The TECH Project will employ a technology known as the Direct Nickel Process™ (DNi Process™) as its primary processing method.
The DNi Process™ uses nitric acid leaching at atmospheric pressure to extract all valuable metals from lateritic ore. It is a key reason the project is expected to be less capital intensive than other Australian nickel-cobalt developments based around high pressure acid leach (HPAL) processing technology.
Whereas HPAL plants require the use of complex, titanium-lined autoclaves that can withstand high pressure, the DNi Process™ will allow the use of standard grade stainless steel at atmospheric pressure – much simpler processing equipment.
The TECH Project also represents a massive step-change in sustainability with no tailings dams or effluent discharge. Recent research conducted by consulting group Minviro suggested it will produce a third less CO2 emissions compared to the industry average for nickel sulfate production (as calculated by the Nickel Institute).
The Minviro report also identified the potential for QPM to further reduce the project’s emissions by receiving CO2 credits for using gas flared or vented from Queensland coal mines to power the plant. Should this option prove viable, the TECH Project could have net-negative CO2 emissions.
Grocott said the aim was to position the company as a world leader in low cost, high quality, sustainable nickel production.
“We are pleased that not only are we leading the way, but that we have further opportunities for improvement, which will be pursued in our feasibility study,” he said.
“The capital raising clears the way for us to create a business which will be a low cost, highly profitable and leading energy chemicals producer for the massive unmet demand for lithium ion batteries.”
This story was developed in collaboration with Queensland Pacific Metals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.