Pure Minerals

Website: www.pureminerals.com.au
Primary ticker: ASX:PM1
Stage of development: Exploration, Development
Commodity: Nickel Cobalt HPA
Project to promote: Townsville Energy Chemicals Hub
Project location: Australia

Live financials

Cash: A$1M
Debt: Nil

Major shareholders:
Andrew Matheson – 7.5%
John Downie – 6.8%
Lily Mah – 4.71%
Management ownership – 15%

Pure Minerals Ltd (ASX:PM1) through its wholly owned subsidiary Queensland Pacific Metals is focused on developing/implementing innovative processing technologies. PM1 aims to build a new treatment plant near Townsville (TECH Project) to produce nickel sulphate, cobalt sulphate and High Purity Alumina (HPA). PM1 recently delivered a positive updated PFS confirming the strong economic potential through all price cycles of the TECH Project.

Management Profile

John Downie, Managing Director

Mr Downie is a mechanical engineer with more than 30 years’ experience in the mining industry. He has been extensively involved in lateritic nickel mining and processing, having previously been Director of Mines for Vale’s Goro operations in New Caledonia, CEO of Gladstone Pacific Nickel and Director of Projects at Queensland Nickel. He has also been employed in senior roles with Barrack Mines NL, Alcoa of Australia Ltd and Boral Resources Ltd.


What is your rationale for attending 121 Mining Investment?

To meet with potential new investors as we progress to the next stage of development of the TECH project.

What recent news would you like to highlight to investors attending?

TECH PROJECT – A Diversified Value-Add Business for all Commodity Cycles

Pure Minerals Limited (ASX:PM1) and its wholly owned subsidiary Queensland Pacific Metals Pty Ltd (“QPM”) recently release its updated PreFeasibility Study for the Townsville Energy Chemicals Hub (“TECH Project”). The updated PFS is a revision of the December 2019 PFS incorporating the addition of a high-purity alumina (“HPA”) refinery and the optimisation work undertaken to reduce gas and water consumption, thereby reducing
operating costs.

PM1 has undertaken sensitivity analysis to run the financial analysis of the PFS using previous study estimates and current spot prices. Whilst commodity spot prices are currently weakened, even with these inputs, the TECH project remains robust, which is greatly encouraging.

Highlights of the Updated PFS include:
– TECH Project has the potential to deliver excellent economic returns and remain financially robust in downward price cycles
– Significant producer of complementary battery chemicals; nickel sulphate, cobalt sulphate
and HPA
– Based on current depressed spot rates for commodity prices and currency:
o Post tax NPV AUD 1.08bn
o Post tax IRR 24.9%
o EBITDA AUD 211m per annum
o Capital payback period 4.3 years
– Next steps are to complete the pilot plant test-work, DFS and obtain all required
development approvals

What are your key goals for the next 3, 6 and 12 months?

3 Months:

Finalise re-commissioning of our pilot plant

6 Months:

Complete metallurgical test-work on bulk samples with product ready to showcase to potential offtakers and strategic investors

12 Months:

9 months – Secure offtake and or corner stone investor
10 months– Complete environmental approvals
12 months – Complete Definitive Feasibility Study

Analyst Insight – provided by Independent Investment Research

Pure Minerals is an ASX-listed company that through its wholly-owned subsidiary, Queensland Pacific Metals Pty Ltd (QPM), is focused on developing a modern battery metals refinery in northern Queensland.

The refinery, dubbed the Townsville Energy Chemicals Hub or TECH, will process imported, high grade Ni-Co laterite ore from New Caledonia in order to produce nickel sulphate, cobalt sulphate and other valuable co-products. With established infrastructure, a well-developed labour pool and a long history of processing imported laterite ore, Townsville is the ideal location for the project.

TECH will employ the processing technology developed and patented by Direct Nickel Projects Pty Ltd, the DNi Process™, which should result in lower capex and opex for the project compared to other nickel laterite processing operations that employ high-pressure acid leaching (HPAL) technology.

Pure Minerals’ senior management has combined experience of more than 60 years in nickel refinery operations and is well versed in dealing with nickel and cobalt buyers around the world.

Pure Minerals has recently completed the Pre-Feasibility Study on the Townsville Energy Chemicals Hub, a 600,000 tpa refinery that will produce 25,000 tpa nickel sulphate/3,000tpa cobalt sulphate. During construction, TECH could employ over 1,000 people and retain over 100 full time employees during operation, proposed to commence in 2021.

The updated PFS confirms the TECH Project has the potential to deliver excellent economic returns and remain financially robust in downward price cycles. Based on current depressed spot rates for commodity prices and currency, Post-tax NPV is estimated at A$1.08bn, Post-tax IRR is estimated at 24.9%, EBITDA is forecast to be A$211m p.a., with a capital payback period of 4.3 years. The next steps are to complete the pilot plant test-work, DFS, and obtain all required development approvals.

With exploration and mining risk minimised via the ore supply agreements, it is anticipated that the company can move rapidly through to a Final Investment Decision and commence development in a much shorter timeframe than typical mining projects.