PFS puzzle coming together for HPA hopeful Impact Minerals

A PFS on Australia’s second high purity alumina project is on schedule for release in Q4 2024
Impact Minerals says a number of workstreams are aligning for its mine to port Lake Hope HPA project
PFS release will boost IPT’s Lake Hope JV stake to 80% and set up potential HPA pilot production in 2025

Special Report: Impact Minerals says the pieces of the puzzle are falling into place for its Lake Hope high purity alumina mine, announcing that a pre-feasibility study remains on schedule to be completed in the fourth quarter of 2024.

Impact Minerals (ASX:IPT), which is aiming to disrupt the valuable but high cost HPA market by tapping a unique source of the versatile commodity, has selected a site for its processing plant, begun discussions with traditional owners, begun work to define an ore reserve and progressed test work ahead of the dispatch of bulk samples to customers as part of the important step.

Lake Hope presents a rare opportunity to produce HPA as a mine to production, expected to be well towards the bottom end of the global cost curve.

4N HPA – aluminium oxide with a purity level of 99.99% – trades for around US$20,000/t. That’s because current major producers in China and Japan, including industrial giant Sumitomo, produce HPA backwards by refining aluminium metal in a chemically and energy intensive process that has pushed up the cost curve.

Lake Hope, according to a scoping study last year, would produce 10,000tpa at just US$4000/t, underpinning strong margins for the product used in LED lights, lithium-ion batteries and flame retardants.

The PFS is an important step as the pre-cursor to a bankable, finance ready definitive feasibility study. But it will also be the trigger for IPT to take a majority 80% stake in the operation from geologist Roland Gotthard’s firm and JV partner Playa One.

READ: The secret recipe that could make Impact Minerals HPA’s Michelin Star chef

What’s on the boil?

Located 500km east of the WA capital of Perth, Lake Hope contains a maiden resource of 3.5Mt at 25.1% Al2O3, with 88% already in the higher confidence indicated category.

Work to take that to measured via infill drilling on the primary West Lake deposit has already taken place, thought to be sufficient to deliver a maiden proven reserve and underpin 15 years of mine life. H and S Resource Consultants are on the case.

Discussions have also been held with the Ngadju Aboriginal People, the traditional owners for the Lake Hope project area, with a negotiation protocol that will set the framework for a land access agreement and cultural heritage management plan currently with Impact.

That will tie in with the completion of a mineralisation report, mining lease layout and miscellaneous licence application for haul road access to support a mining lease application, a critical step before a deposit can be extracted. Impact says building a new haul road will deliver savings over upgrading existing tracks.

Meanwhile, it has selected Kwinana as its processing plant site, choosing the industrial area near Perth over the Goldfields city of Kalgoorlie due to the savings on reagent costs, with a process called low temperature leach selected as the most effective process for producing HPA at scale.

Assays for test work on the bespoke in-house process and a sulphate process will be due in August.

A block of land has been identified in Kwinana, with CPC engineering engaged to tackle design studies to estimate capex and opex for the process plant.

Samples are also being produced for potential offtake partners, with quotes received for a pilot plant ahead of further study work.

Impact says initial experimental work has produced a hydrated alumina product with uses in the catalyst and flame-retardant industries, as well as early stage discussions with ceramic and alumina producers in Europe and the US.

Impact will haul ore from Lake Hope to Kwinana, where reagents are in abundance. Pic: IPT

Piecing it all together

Impact MD Mike Jones used the puzzle metaphor to describe the process of pulling together the Lake Hope project.

“The Lake Hope Pre-Feasibility Study is like a large jigsaw puzzle where we know what the final picture looks like and are now starting to see many of the individual pieces falling into place at a great pace. We have been focused on the puzzle’s edges with progress made at the proposed mine at Lake Hope itself, the process plant, which will be in Kwinana and increasingly, product offtake and marketing,” Dr Jones said.

“We are filling the puzzle with discussions with the Ngadju peoples, preparing a Mining Lease Application and completing drilling to help define a maiden Reserve. We have selected Kwinana as the site for the processing plant and our proprietary Low-Temperature Leach as the best method to scale up HPA production to the planned 10,000 tonnes per annum because of substantial strategic advantages.

“These include ready providers for all the reagents we need, ready buyers for our by-products and a site possibly suitable for the plant. As a result, we recently commissioned CPC Engineering to provide design engineering and capital and operating costs for the LTL process plant on that site.”

Jones said IPT was looking at ways to accelerate pilot plant development for Lake Hope, which is in the box seat to become the second HPA project in Australia to head into development after the Canberra and Orica-backed Alpha HPA (ASX:A4N) project in Queensland.

“Recent developments with Alpha HPA Limited, which has shown very strong global demand for HPA and related products, clearly demonstrate to me that “if we build it, they will come”,” he said.

“We continue on schedule to complete the PFS by the end of the year and set ourselves up for significant strides towards production in 2025.”

This article was developed in collaboration with Impact Minerals, 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.