Altech sells high purity alumina exploration licence for $2 mln cash

Altech Chemicals Limited has announced the execution of an agreement with Dana Shipping and Trading S.A. for the sale of exploration licence E70/3923 at Meckering, Western Australia for $2.0 million.

The exploration licence is surplus to Altech’s feedstock requirements for its proposed Malaysian high purity alumina (HPA) plant. Feedstock for the plant will be sourced from within M70/1334 which contains an estimated ~11 million tonnes of kaolin mineral resources, representing in excess of 250 years of supply for the HPA plant. Altech continues to hold exploration licences E70/4708, E70/4716, E70/4717EL at Meckering.

Altech will receive proceeds from the sale in two tranches; Dana has already paid a non-refundable cash deposit of $250,000, the balance of $1,750,000 will be paid within 5 business days of the grant of mining lease M70/1334. The grant of M70/1334 is expected to take only a matter of months and will be progressed by the company in accordance with standard procedures of the Department of Mines and Petroleum (WA).

Execution of the agreement also settles the dispute with Dana over the company’s termination of the Kaolin Mining Rights Deed (refer ASX announcement dated 29 March 2016 for details).

Managing Director, Iggy Tan said “the sale of E70/3923 is a win-win outcome for both parties. For Altech, it monetises the portion of the company’s Meckering kaolin deposit that is surplus to requirements for our HPA project, plus we receive a larger up-front cash injection compared to what was provided for in the Kaolin Mining Rights Deed. For Dana, the agreement delivers kaolin resources for the development of its bulk kaolin business and it removes the requirement for Dana to share M70/1334 with Altech, which was the previous arrangement”.