WA Kaolin Limited - June 2024 Quarterly Activities Report
WAK (WAK) Share Update July 2024 Wednesday 24th
WA Kaolin Limited Reports Promising Quarterly Activities
WA Kaolin Limited (ASX: WAK) has released an encouraging update on its activities for the June 2024 quarter, showcasing robust sales, strategic financial placements, and advancements in production and R&D.
Instant Summary:
- Sales for the June quarter reached 3,398 tonnes and $772k.
- Secured $7.0m in a two-tranche placement at a premium to the current share price.
- Maintained a cash position of $0.7m at the end of June 2024.
- Progress in engineered ceramic and paper grades with new customer acquisitions.
- Classifier project on track with key machines arriving by end of August.
Sales and Marketing
In the June 2024 quarter, WA Kaolin achieved sales of 3,398 tonnes, generating $772k in revenue. Despite a sluggish Asian construction market post-Covid, the company has made significant strides in marketing efforts across Asia, securing 16 new customers for FY 2024 with more in the pipeline. The development of engineered ceramic and paper grades is progressing well, and there is a focus on sales of beneficiated ore with promising results.
Financial Overview
WA Kaolin successfully completed a two-tranche placement, raising $7.0m at 6 cents per share, a substantial premium to the prevailing share price. Tranche 1 secured $2.0m in early May 2024, and with shareholder approval on 23 July 2024, Tranche 2 secured an additional $4.95m, with $1.05m subject to FIRB approval. The company also announced a Share Purchase Plan to raise an additional $0.5m. As of 30 June 2024, WA Kaolin maintained a cash position of $0.7m, with part of the placement amounting to $3.9m set to settle by 29 July 2024.
Production and Projects
The Wickepin plant maintained steady reliability at 85% for the quarter, with minor issues resolved to improve power station reliability. The classifier project is well advanced, with key machines scheduled to arrive by the end of August. Structures, auxiliary equipment, and electrical aspects are on track, with $2m of the $3m budget already paid and no expected overruns. The success of this project is anticipated to provide finer products, enhancing sales opportunities.
Research and Development
Continued R&D efforts have focused on building sales in ceramics, paint, and paper applications, including the promotion of beneficiated ore for further refining offshore. Progress has been made in developing engineered ceramic products, with samples approved by some customers and more samples being distributed. A second round of fine grinding of paper grade kaolin is scheduled in Henan, China, with modified precursor techniques to improve viscosity. Metakaolin and geopolymer investigation and trials are also ongoing.
Corporate Activities
WA Kaolin held a General Meeting on 23 July 2024, where shareholders overwhelmingly approved the ratification of the Tranche 1 placement, options issue, and the issue of shares to major shareholders and related parties in Tranche 2. The approval also covered the issue of SPP securities and shortfall securities.
The positive sales figures and strategic financial placements are likely to bolster investor confidence in WA Kaolin. The advancements in production and R&D, along with the successful classifier project, position the company for future growth. The premium placement price indicates strong shareholder support, which could positively impact the stock price.
Investor Reaction:
Analysts have expressed optimism about WA Kaolin's strategic initiatives and financial progress. Investors are encouraged by the company's ability to secure funding at a premium and the ongoing advancements in production capabilities.
Conclusion:
Investors should monitor WA Kaolin's continued progress in sales, production, and R&D. The successful execution of the classifier project and the company's strategic financial moves are key factors to watch. WA Kaolin's ability to navigate market challenges and secure new customers will be crucial for sustained growth.