Pure Alumina shares soar on commercial shipments of top-quality high purity alumina
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Special Report: Shares in Pure Alumina (ASX:PUA) soared 85 per cent yesterday after the company announced it had passed a major milestone, shipping commercial quantities of high purity alumina (HPA).
The stock hit a high of 6.6c, a rise of 153 per cent, on the news that Polar Sapphire, the Canadian company being acquired by Pure Alumina, had successfully run its HPA pilot plant at full capacity.
This enabled it to deliver almost 10 tonnes of 99.999 per cent (5N) high purity alumina over the past two weeks.
But more importantly, it proves that Polar Sapphire’s patented technology works.
“The quality of Polar Sapphire’s HPA produced at its Toronto pilot plant together with its attention to customer service has resulted in growing commercial sales of it 5N HPA,” Pure Alumina said in a statement.
“The current shipments of nearly 10 tonnes are going to several sapphire producers. It is encouraging that orders for Polar HPA are increasing in quantity to current customers and attracting new customers.”
Pure Alumina believes Polar Sapphire is an outstanding acquisition opportunity because of its unique HPA process, which is protected by patents and custom-made equipment.
This process generates such a superior product that customers who use it get up to 25 per cent more yield compared with using other sources of HPA.
Polar Sapphire’s patented HPA process also gives it one of, if not the, lowest HPA capital costs in the world for 5N HPA.
Polar Sapphire, which has established HPA sales with a number of sapphire producers, has the key benefit of a modular plant, meaning it can expand by simply installing additional modules, this keeps capital costs extremely low.
Demand for HPA, which is used in LED lighting and lithium batteries, is soaring, with sales expected to hit US$5 billion next year compared with US$2 billion in 2015.
To meet this surging demand, Polar Sapphire plans to build a commercial-scale factory which is projected to generate net revenue of ~US$55 million a year by year-five.
Importantly, commercial HPA production will commence in 2019, years ahead of other proposed HPA projects.
Pure Alumina plans to increase Polar Sapphire’s production facility to 1,000 tonnes per annum of HPA within 12 months.
With HPA demand forecast to grow rapidly, it anticipates further expanding HPA capacity quickly to an initial HPA target of 5,000tpa within three years.
Pure Alumina Managing Director Martin McFarlane said: “The attractive market fundamentals of HPA has caught the attention of a number of companies.
“Only Pure Alumina, through its proposed acquisition of Polar Sapphire, has access to a HPA pilot plant making commercial HPA sales today and low cost expansion plans that could be delivered within a year.”