Pure Minerals deep dives straight into production after acquisition of battery metals play QPM
Special report: Pure Minerals has announced the acquisition of fellow battery metals play Queensland Pacific Metals (QPM), which is aiming to establish a battery-grade nickel-cobalt processing plant in Townsville, Queensland.
A tie up with private company QPM gives Pure Minerals (ASX:PM1) an attractive entry point into nickel and cobalt sulphate production – value-added products in high demand from the growing electric vehicle and stationary storage sector.
QPM plans to kick off feasibility studies into building a modern plant at Townsville, producing about 25,000 tonnes of nickel sulphate and 3000 tonnes of cobalt sulphate a year using ore from the French island territories of New Caledonia.
Townsville is the ideal location – its reputation as an emerging battery manufacturing region is complemented by existing infrastructure, skilled labour, and engineering support.
It also has a long history of processing ore from New Caledonia – just 2000km east of Townsville – which hosts the world’s largest laterite ore reserves containing about 700,000 tonnes of cobalt and 7 million tonnes of nickel.
QPM’s management team worked at the former Queensland Nickel refinery in Townsville, where they established supply agreements with a number of New Caledonian mining companies.
Through this longstanding relationship, QPM has secured a binding supply agreement to purchase 600,000 tonnes per year of high-grade nickel-cobalt ore.
“It’s a unique opportunity — those contracts aren’t secured by just anyone,” Pure Minerals chairman Jeremy King says.
“These are world class mines in New Caledonia; long term, high volume, and high-grade mining operations.
“It’s a really unique opportunity for Pure Minerals investors to get exposure to that in a small cap stock.”
The company will have an enterprise value of $2.7m post acquisition, giving investors leverage.
For investors, this means less risk; the agreement removes the perils associated with finding, proving up, and developing a mining project.
“It is resource estimation, mining, geotechnical, and engineering risk — all eliminated,” Mr King said.
QPM will purchase ore from established miners with a long-term track records of exporting to Australia and other counties, such as Japan and Korea.
The proposed Townsville plant will process the nickel-cobalt feed at an average grade of about 1.60 per cent nickel and 0.17 cobalt — grades superior to a number of high-profile Australian projects.
Higher grade feed means a smaller plant is required to process the same amount of sulphate, which lowers start-up capital expenditure.
The higher grades also mean lower ore throughput which requires less chemicals, power and other consumables — reducing operating costs.
And it complements Pure Minerals’ existing focus, which is on producing high value products for the battery sector via development of its Battery Hub manganese-cobalt project in Western Australia.
All of these factors give Pure Minerals and QPM a healthy competitive advantage, says Mr King.
“Pure Minerals is excited with about this opportunity with QPM complementing our focus on the emerging battery materials market,” he said.
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