Allup Silica Acquires McLaren Valuable Heavy Mineral Sands Project in WA
ALLUP SILICA LIMITED (APS) Share Update August 2024 Monday 5th
Allup Silica Acquires McLaren Valuable Heavy Mineral Sands Project
Allup Silica Limited (ASX: APS) has announced the acquisition of the McLaren Valuable Heavy Mineral Sands (VHMS) Project in Western Australia, along with a placement to raise $360,000 for working capital.
Instant Summary:
- Acquisition of 100% of McLaren VHMS Project.
- Indicated and inferred JORC Resource of 280Mt @ 4.8% Heavy Mineral.
- Project spans 333 sq km, located 150km east of Norseman, WA.
- Ilmenite prices above US$300/t due to titanium shortages.
- Strong market demand for ilmenite expected to continue.
- Allup to focus on lower-cost Capex design for mine development.
- Placement of $360,000 to raise working capital.
Project Details
Allup Silica Limited has acquired 100% of the McLaren Valuable Heavy Mineral Sands (VHMS) Project, located on the western side of the Eucla Basin in Western Australia. The project comprises 333 sq km of tenements and is situated 150km east of Norseman. The McLaren Project is an advanced-stage exploration project with an indicated and inferred Mineral Resource estimate of 280Mt @ 4.8% Heavy Mineral, completed in 2022.
Ilmenite, a key titanium mineral, is priced well above international silica and kaolin prices at more than US$300/t due to increasing titanium shortages. The strong market demand for ilmenite is expected to continue, driven by supply deficits and mine closures in Kenya, South Africa, and Mozambique.
Strategic Plans
Allup plans to focus on a lower-cost Capex design to fast-track mine development and produce a bulk concentrate. The company will advance Pre-Feasibility Study (PFS) and Bankable Feasibility Study (BFS) for the McLaren Project with infill drilling and metallurgical and mineralogical evaluations to confirm project economics.
Placement and Funding
To support the acquisition and ongoing project development, Allup has undertaken a placement to raise $360,000 in working capital. The placement involves the issue of 9,000,000 shares to sophisticated, professional, and institutional investors at an offer price of A$0.04 per share. Directors Campbell Smyth, Andrew Haythorpe, and Gavin Ball have agreed to subscribe $50,000 of the placement, subject to shareholder approval at an upcoming meeting.
The placement will be conducted using the company’s LR 7.1 and 7.1A approval. CPS Capital Group Pty Ltd has been appointed as Lead Manager to the placement and will receive a management fee of 2% and a placing fee of 4% for funds raised via the placement.
The acquisition of the McLaren VHMS Project is a significant step for Allup Silica, positioning the company to benefit from the high demand and pricing for ilmenite. The project's advanced stage and substantial resource estimate provide a solid foundation for future development. The successful placement to raise $360,000 will support the company's working capital needs and facilitate the advancement of feasibility studies.
Investor Reaction:
Analysts are likely to view the acquisition positively, given the strong market demand for ilmenite and the project's advanced stage. The placement demonstrates investor confidence in Allup's strategic direction and ability to execute its plans. However, investors will be keen to monitor the progress of feasibility studies and the company's ability to bring the project to production efficiently.
Conclusion:
Investors should keep an eye on Allup Silica's progress with the McLaren VHMS Project, particularly the results of the PFS and BFS. The company's strategic focus on a lower-cost Capex design and the strong market demand for ilmenite present a compelling investment opportunity. Stay informed on Allup Silica's developments and consider the potential long-term benefits of this acquisition.