Suvo’s Pittong acquisition is charging up its balance sheet
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Suvo’s acquisition of the Pittong hydrous kaolin operations is paying off with the project generating EBITDA of $723,000 in its first full quarter of operations.
The earnings before interest, taxes, depreciation, and amortisation were derived from the sale of 6,458 tonnes of refined kaolin products.
Pittong produced 5,920t of refined kaolin products during the quarter.
Suvo Strategic Minerals’ (ASX:SUV) result is a fitting cap to the March 2021 quarter, which has seen the company reaching an agency and distribution agreement with French multinational Imerys S.A. along with completing resource definition and step-out drilling at the Pittong and Trawalla Mines.
The company has also increased kaolin resources at its White Cloud project by 84 per cent to 72.5Mt of bright white kaolinised graphite and completed resource definition and step-out drilling at the Pittong and Trawalla mines.
Additionally, Suvo is setting the stage for the future with the signing of the first indicative offtake terms for White Cloud kaolin with C.M.M. Toye Industrial Mineral Consultants, reaching a non-binding memorandum of understanding with top tier Chinese ceramic producer LIXIL AS Sanitary Manufacturing (Tianjin) and starting research and development work on high purity alumina applications.
Suvo had completed the acquisition of the Pittong mining and processing operations near Ballarat, Victoria, from Imerys at the beginning of this year.
Pittong 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.
However, the company believes that the project has sufficient resources to support a considerable upgrade to the existing plant with executive chairman Robert Martin telling Stockhead in January that a three- or four-fold expansion could be possible to meet the demand for hydrous kaolin.
Results are pending from aircore drilling carried out to convert current PERC reserves and resources into their JORC compliant equivalents.
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.