Suvo signs key sales deal for Pittong hydrous kaolin
Special Report: Suvo has reached an agreement to sell their products from its Pittong hydrous kaolin operations to French multinational Imerys S.A.
Under the two-year agency and distribution agreements, Imerys will buy products exported from Pittong for its own clients and act as an agent to service direct sales to the project’s offshore clients.
This will allow the company to leverage Imerys’ existing international network of customers.
Incidentally, Suvo Strategic Minerals (ASX:SUV) had acquired the Pittong mining and processing operations about 40km from Ballarat, Victoria, from Imerys late last year, making it Australia’s only hydrous kaolin producer.
The timing for the agreement also comes as demand for hydrous kaolin returns to pre-COVID levels.
“This is an excellent outcome for Suvo and we are pleased to formally enter into these agreements with Imerys as they are one of the world’s largest suppliers of industrial minerals with a footprint covering the entire globe,” executive chairman Robert Martin said.
“It makes perfect sense to use that footprint to help market our products.
“Imerys were extremely professional and cooperative to deal with during the purchase of their Pittong operations and we hope to continue to develop that relationship with them moving forward with these agreements.”
The Pittong project consists of three mining leases and a processing plant that produced 25,000t of kaolin in 2019, generating revenues of $13m and before tax earnings of $2.1m.
Suvo has expressed its belief there are sufficient resources in the ground to support a considerable upgrade to the existing plant and have a drilling campaign planned to test this belief.
Martin told Stockhead in January that the company was looking to expand the plant by three or four times to meet demand for hydrous kaolin.
It recently completed aircore drilling at Pittong to assist in converting the current PERC reserves and resources into their JORC compliant equivalents.
Additionally, the acquisition of Pittong gave the company access to a pool of experienced personnel that are expected to help drive development of the White Cloud kaolin project in Western Australia.
Earlier this week, resources at White Cloud were upgraded by 13 per cent to 39.5Mt of kaolinised granite while infill drilling has increased the confidence in the estimate with 26.7Mt now considered to be indicated.
Indicated resources have sufficient information on geology and grade continuity to support mine planning.
This article was developed in collaboration with Suvo Strategic Materials, 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.