Young kaolin and silica sand company Suvo Strategic Minerals (ASX:SUV) will buy Australia’s only significant kaolin mining and processing operations. (Image: Getty).
Suvo Strategic Minerals is about to become a cash-making kaolin producer
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Special Report: Young kaolin and silica sand company Suvo Strategic Minerals (ASX:SUV) will buy Australia’s only significant kaolin mining and processing operations.
Suvo – which listed on the ASX in August this year – will pay French multinational Imerys S.A. $2m for assets consisting of three mining leases and a processing plant, ~ 40km from Ballarat in Victoria.
The assets have been producing and selling kaolin products to paper, coatings, paint and specialist industries (including rubber and pharmaceutical applications) since 1972.
In 2019, 25,000 tonnes of kaolin products generated revenues of $13m and before tax earnings of $2.1m.
To fund the acquisition, Suvo has firm commitments to raise $6m (before costs) via a conditional placement “with strong institutional support”.
The acquisition also presents strong synergies with Suvo’s flagship White Knight kaolin project in WA.
Having access to experienced management in kaolin mining, processing operations and sales and marketing could be invaluable.
Suvo is on track to upgrade the 31.5 million tonne resource at White Knight to the higher confidence indicated and/or measured categories that will support mine planning.
Suvo executive chairman Robert Martin says this is a fantastic opportunity for a young company to acquire Australia’s only significant wet producing kaolin operation.
“We will have access to Australia’s only experienced operational kaolin mining and wet processing personnel from whom we will learn tangible applications for our White Knight Kaolin project in Western Australia,” he says.
“We are excited to become a producer as well as continuing to focus on our existing kaolin and silica exploration and resource definition activities in Western Australia where we have recently completed drilling programs and expect to release the results later this calendar year.
“Overall, it’s been a rapid and sustained development for the Company as we progress from a pure exploration company into a miner and producer.”
Suvo has enjoyed a great first few months on the ASX, up +320 per cent since early August.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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