Corella targets offtake deals after releasing Tampu MRE

Corella Resources recently released the maiden inferred mineral resource estimate (MRE) for its Tampu Kaolin project in WA of 24.7 million tonnes and has already supplied samples for potential offtake partners to test.

The MRE had an average yield of 53% for 13.1 million tonnes at 36.5% aluminium oxide of <45μm very high quality bright white kaolin with super low impurities.

Because of these super low impurities, the company is confident of its potential use as high purity alumina (HPA) feedstock – which is in increasingly high demand in smartphones, LEDs and lithium-ion batteries.

Plus, HPA commands premium prices of up to $60,000 per tonne, and Corella Resources (ASX:CR9) managing director Tony Cormack said future demand is set to soar.

“I believe that batteries and green energy storage is the way of the future, and this market is set to expand significantly,” he said.

“Why do I say that? Because lithium-ion batteries are here to stay for a while, there may be technologies that will replace them, but to commercialise new technology take 10 years at the absolute minimum.

“What HPA does is it creates foils and coatings on the components in the battery that minimises heat transfer between the components which results in the batteries lasting up to 30% longer.

“And anything that can make these batteries last longer, is a good thing.”

Scoping study the next step

Cormack said the next step is to take the project through to a scoping study, and advance diamond drilling along with more detailed metallurgical test work.

“Our intention right back at the start was to find the absolute highest purity kaolin in the ground to give us the best chance of success of creating the HPA product at the end – and the Tampu MRE really is confirmation that we’ve achieved that,” he said.

“We will now progress toward scoping and feasibility studies, with HPA test work results to underpin the economics, where we anticipate the high grade and low impurities will translate to a low-cost operation with high profit margins.”

The company is planning to advance offtake negotiations for Tampu feedstock early next year.

Plenty of room for resource growth

Cormack also said the resource has room to grow, with the company increasing its landholdings 446% since listing in April this year.

“We knew from the drilling results that we had something different than what’s out in the market, we knew we had something special,” he said.

“So, we quickly moved to increase our landholding to secure all the prospective areas in the entire Beacon region.

“And pleasingly we had significant assistance from the locals who gave us access to their properties and took us out to areas where there were really nice bright white kaolin exposures at surface.

“They assisted us a lot in going out there and picking out the prospective areas so that we can add additional tonnes, but also to lock out any competition.”

Shallow open cut potential

Cormack said that Tampu was amenable to a simple, shallow open pit operation, with the resource sitting on average about 4 metres below the surface.

“We believe with the 24.7 million tonnes at Tampu, regardless of what our production profile is going to look like, that’s going to equate to a significant mine life,” he said.

“I’m very comfortable with our resources, once we convert it through the process, that we’ll get the majority of the Tampu resource through to indicated and measured and I’m very comfortable with the mine life that we’ve defined.

“We’re also sitting on freehold land, with extremely supportive landowners, that will allow us to have a lot more flexibility in how we operate out there.

“We’ve got test work underway by independent institutions and by potential offtake partners, and once we’ve confirmed the quality through those processes, we should be able to then progress Tampu pretty quickly into an operation.”

This article was developed in collaboration with Corella Resources Limited, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.