Suvo locks in critical mining access agreement for White Knight; shares rip higher
Special Report: Suvo has cleared a major hurdle in the development of their White Knight kaolin project — securing the all-important mining access agreement — as it positions itself to become just the second kaolin miner in Australia.
Suvo Strategic Minerals (ASX:SUV) has successfully negotiated a mining access agreement with the private landowner and occupier of the tenement that covers the company’s White Knight kaolin project in Gabbin, Western Australia.
And the company has done it ahead of the key studies it needs to do that will ultimately lead to a decision to mine.
Investors were impressed, sending the stock up over 31 per cent to a high of 8.4c on Tuesday morning.
Having ticked this important box, Suvo can now accelerate environmental and economic studies for White Knight, which hosts a maiden inferred JORC resource of 31.5 million tonnes of ‘bright white’ kaolinised granite.
Kaolin is a feedstock for high purity alumina (HPA), a component of lithium-ion batteries and LED lights. It also has a wide range of other industrial uses, like paper and paperboard, fiberglass, ceramics and paint.
Market researchers estimate the global kaolin market is currently worth $US3.1bn ($4.4bn) and is expected to reach $US4.1bn by 2025.
“This is an excellent outcome for Suvo, having reached this critical milestone at such an early stage places Suvo in a unique position of being able to progress economic feasibility studies, mine planning and environmental aspects of the project with the utmost confidence in the ability to fully access and mine the tenements once completed,” executive chairman Robert Martin said.
“There is only one other producing kaolin mine in Australia and we are targeting to be the second.”
Having only drilled 0.5 per cent of their 44,000 hectare tenement and with the mining access agreement safely squared away, Suvo now plans to immediately begin step out drilling to convert its initial inferred resource to the highest confidence measured resource and subsequent reserve.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured. By moving resources into the indicated and measured category, it means a company has sufficient information on geology and grade continuity to support mine planning.
Resources can then be converted to reserves, which are commercially recoverable using existing technology.
Suvo plans to have a reserve in place by December 2020.
Bulk samples of raw product will be sent to the United Kingdom for further metallurgical test work, the results of which will further define end-user specifications and potential product pricing.
At the same time, Suvo will begin environmental and economic feasibility studies.
The environmental studies will underpin the application for a mining licence while the feasibility study will focus on the economics and infrastructure requirements to build a wet processing and beneficiation plant.
Concurrently, end users will be sent processed samples with the goal of securing off-take agreements.
This article was developed in collaboration with Suvo Strategic 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.