Unearthing High Purity Alumina's Potential: Impact Minerals'(ASX:IPT) Dr. Michael Jones on the Lake Hope Project and Market Dynamics
May 15, 2024
Andrew Musgrave
Prepare to unlock the secrets of mineral exploration with Dr. Michael Jones from Impact Minerals, who joins us to dissect the company's strategic journey towards finding world-class mineral deposits. Dr. Jones, a veritable treasure trove of knowledge, illuminates the ins and outs of the Lake Hope High Purity Aluminum Project, revealing its economic significance, thrilling advancements, and the critical negotiations with the Ngaju peoples that could reshape the industry's future. If you're captivated by the complexities of the mining sector and its influence on market capitalization, this is the episode you can't afford to miss.
Venture into the realm of high purity alumina (HPA), a mineral that's become the linchpin of modern industries and has staked its claim on critical mineral lists globally. Dr. Jones details the substantial funding opportunities for HPA projects, inspired by the likes of alpha hpa (A4N) and their achievements, while also guiding us through the electrifying prospects of new mineral discoveries like the Arken project. In a world where technology's hunger for high-grade minerals is insatiable, join us for this episode that concludes with a forecast of HPA's essential roles and market expansion by 2026-2027. It's a profound glimpse into the future of tech and the strategic moves shaping a billion-dollar industry.
Prepare to unlock the secrets of mineral exploration with Dr. Michael Jones from Impact Minerals, who joins us to dissect the company's strategic journey towards finding world-class mineral deposits. Dr. Jones, a veritable treasure trove of knowledge, illuminates the ins and outs of the Lake Hope High Purity Aluminum Project, revealing its economic significance, thrilling advancements, and the critical negotiations with the Ngaju peoples that could reshape the industry's future. If you're captivated by the complexities of the mining sector and its influence on market capitalization, this is the episode you can't afford to miss.
Venture into the realm of high purity alumina (HPA), a mineral that's become the linchpin of modern industries and has staked its claim on critical mineral lists globally. Dr. Jones details the substantial funding opportunities for HPA projects, inspired by the likes of alpha hpa (A4N) and their achievements, while also guiding us through the electrifying prospects of new mineral discoveries like the Arken project. In a world where technology's hunger for high-grade minerals is insatiable, join us for this episode that concludes with a forecast of HPA's essential roles and market expansion by 2026-2027. It's a profound glimpse into the future of tech and the strategic moves shaping a billion-dollar industry.
Andrew Musgrave:
Welcome to ASX Briefs. I'm your host, Andrew Musgrave, and today we have the pleasure of speaking with Dr Michael Jones, the Managing Director of Impact Minerals. We'll delve into the company's diverse exploration projects, including their flagship Lake Hope project, and discuss the company's strategic approaches and recent advancements in mineral exploration. Mike, thanks for joining us today and welcome to the ASX Briefs podcast.
Dr. Michael Jones:
Yeah, great to be here, Andrew, and it's our inaugural podcast, so very pleased to be speaking to you.
Andrew Musgrave:
Very good. So let's just get started. If you can just give us a brief overview of Impact Minerals and the key focus areas for your exploration and development activities.
Dr. Michael Jones:
Yes we listed on the ASX back in 2006, and I had a history of project generation in a number of companies, but in particular Western Mining Corporation, which some of your listeners might remember. They were eventually taken over by BHP. But all of that work that we did during that was really looking for what we like to call world-class deposits. Now it's become a bit of a trope in a way to do that. But what I've found over the years is that unless it is a world-class deposit and I'm going to quote things like the De Grey discovery, the Bellevue discovery, even Chalice, I know it's come off a little bit and more recently Azure these are companies that sort of reached a billion-dollar market cap really without actually turning a sod of earth with a mine. You know, we see a lot of companies out there that have got market caps, say $150 million, $250 million, and they're sort of one-mine companies and it's kind of always a struggle and it takes almost as long to bring those into production as it does a bigger deposit. So, look, Impact has always been focused on the bigger things. They are few and far between, and so some of those companies I just described, like Azure was a 20-year overnight success. I think De Grey was 17 years and so they're few and far between and it can take a lot of work and effort to get to them.
Dr. Michael Jones:
So the reason for that preamble is that we believe that we now have our hands on a world-class deposit.
Dr. Michael Jones:
It wasn't something that we found, but it's a joint venture that we have and in a way, we did discover it.
Dr. Michael Jones:
The owner was actually fishing for joint venture partners on LinkedIn and we were one of the ones that.
Dr. Michael Jones:
The only one that bid, and it's the Lake Hope High Purity Aluminum Project and we can talk about that in a bit more detail. But the thing that makes it world-class is that the economics that we put out in our scoping study is that the net present value of that project is well north of a billion dollars Australian, and that kind of gives a target to drive our market capitalisation to over the next few years. But very significantly it's also going to be one of, if not the lowest cost producers of this high purity alumina which we can talk about. So that's very much the focus for the company. We're in the middle of a pre-feasibility study which should be completed by the end of this year, and we've got a lot of news flow to come from that and we're also tickling along a couple of our other exploration assets and we've done a little bit of drilling here in the wheat belt in WA and we'll have some news from that coming up as well. So look very busy and active time.
Andrew Musgrave:
Yeah, and obviously, as you mentioned, the key focus is that Lake Hope High Purity Alumina project and that's central to your operations. Obviously. Can you just give us a bit of a guide of the project scale, its key components and why it's a standout for the company?
Dr. Michael Jones:
So the unique thing about this particular project is that the material we're going to mine if you can call it that, it's really a small quarry is in the top two metres of two small salt lakes, or salt pans, as we call them, about 500 kilometres east of Perth, literally in the middle of nowhere, and, amazingly enough, there's something in the order of 20 billion US dollars worth of high purity alumina in the top two meters of that lake. It's quite an exceptional deposit of unusual minerals that are exceptionally fine grained, and so that combination gives us very cheap mining and processing costs compared to other producers or potential producers of high purity alumina. And it was one of the reasons that I got into the project because of the low operating cost in particular. And when you're in something like industrial minerals or bulk commodities, being one of, if not the lowest cost producer is one of the real keys to success and getting through the mining cycle, and so the pre-feasibility study that we're doing at the moment is looking to sort of firm up those numbers the NPV that we mentioned and also the operating cost and we're right in the middle of that process at the moment.
Dr. Michael Jones:
So it's an interesting time. I've always wanted to build the mine and, as they say, be careful what you wish for. My inbox fills up with more approvals, requirements, more negotiations with various groups, interested parties, a very important one of which, of course, is the Native Title Group, the Aboriginal group there, the Ngaju peoples, and I'll be spending a lot of time in the next 12 months negotiating a mining agreement with them as we move towards production, small scale production at least in, hopefully by 2026 and 27. So very active.
Andrew Musgrave:
Yeah, and obviously you've had some pretty positive news flow of late. So what have been the most significant findings on the back of some of those announcements and how do they influence your decisions moving forward?
Dr. Michael Jones:
Yeah, probably best to sort of put that in the context of the pre-feasibility study. So we have there are four pillars to the pre-feasibility study. The first pillar is actually metallurgical test work. So with high purity alumina, it's all about how pure it is, and so we have a benchmark in the industry that's 99.99% pure alumina or aluminium oxide. It's known in other forms as corundum and also sapphire. 99.99% pure alumina or aluminium oxide. It's known in other forms as corundum and also sapphire. And so one of the uses, for example, is sapphire glass that everyone has in their iPhones, their iWatches and other tablets, et cetera. And so the metallurgical test work is designed to basically optimise that process and we've got a couple of different process routes we can go and we've produced HPA in both of those, and those were significant announcements that we did in February and we're working forward in the PFS to determine which one of those two will be the process that we go forward through to mining and processing. So that's the first pillar.
Dr. Michael Jones:
Second pillar is actually the mining approvals process. So one of the great advantages of this lake is that it's naturally very acidic. It's got a pH of three, which basically means if you stand there in your boots. Your boots will rot quite quickly but as a result, there's not a blade of grass on there and there's very few living animals apart from some spiders, and so from an environmental point of view, there's no impediments to mining on the lake and we've also got heritage clearance from the Ngaju, so there are no significant native title or heritage issues on the lake. So, like I mentioned, subject to us getting a mining agreement with them, we're good to go there. So that's the approvals route and we hope to lodge the mining lease later this quarter.
Dr. Michael Jones:
The third one is where we're going to build the plant. That's moved on significantly since our scoping study in November. We were looking at either Kalgoorlie or Perth and a few other options, but it really looks very much like we'll be building in Kwinana. It's very close to the port of Fremantle and we need reagents to come in and that's the significant cost saving for us. So we will truck our material.
Dr. Michael Jones:
500 kilometres Sounds like a long way, but because we're basically just digging up dirt, stockpiling it and then trucking it off site, the operating cost is a mere fraction of the overall cost of producing the material. And the last one and this is very important in industrial minerals, bulk commodities is getting the offtake agreements with end users, and so we'll have significant material to start that process in the back end of this year. And that's a process that can take a couple of years to look towards getting offtake agreements, but that's around about the time we hope that mining lease will be granted and so we should be able to flow through into at least small scale production in that sort of 26, 27 timeframe. So that's a bit of a great overview, I think, where all the work is happening at the moment, and there's a fair bit of it, let me tell you.
Andrew Musgrave:
Yeah, and I think obviously, as we know, with any mining project you need government support and funding and you've just actually received some funding under the WA government's EIS scheme for the Caligula copper project. Can you give us an idea of how important that support is for the ongoing exploration projects.
Dr. Michael Jones:
Well, certainly, things like the EIS exploration incentive scheme, which basically all the states have going now, has really made, I think, a big difference to a lot of junior companies who've got bright ideas and not a lot of funding. And the governments have generally been quite generous with the funding of these projects because they've demonstrated it does lead to increased exploration success. So it's a great longer-term return for the governments. So in the case of the, so we have a Caligula copper target. It's in the Wheatbelt about 150km outside Perth. We'll be drilling that later this year. That's a standard sort of exploration project, if you like, and we've got geophysical anomalies, geochemical anomalies there and we'll be drilling that to test it for copper.
Dr. Michael Jones:
In terms of the HPA high purity alumina, it's actually listed on the critical minerals list for Australia along with Europe and North America, and that does open up significant funding avenues for us going forward. An example of that funding recently, the leading player in this space is a company called Alpha HPA code is A4N, and people should look at their history because I'm hoping to follow in their footsteps. They recently received 400 million dollars in low cost loans to help build their main plant and that's the sort of size and scale of plant we'll be looking at, although our process is simpler and cheaper and so it won't cost as much. But that's a sort of example of the money that is, you know, floating around. You obviously got to go through processes to get it, because HPA is on the critical minerals list.
Andrew Musgrave:
Yeah, and I think, like as you said, the government's been very proactive in that space around their critical minerals and how they want to develop a whole range of industries locally. So now, just putting Lake Hope aside just for a moment, are there any new areas or minerals that you're actually looking to explore in the near future?
Dr. Michael Jones:
So, as I'd like to say, news flows are going to be dominantly the test work and progress on the pre-feasibility study. They're perhaps not the sexiest things to be putting out into the marketplace. And so we are exploring our Arken project, which has got the Caligula target associated in it, and so we've got there's plenty of nickel, copper, PGD, lithium and gold targets in there that we're very keen to keep following up and in that sense we keep the exploration sizzle going as well. But the other parts of our portfolio we are, or were, a project generator. We're now a developer that we've had on the books for a little while.
Dr. Michael Jones:
We're looking to rationalise that. We have a possible IPO of some copper gold assets in New South Wales. We also have a possible joint venture on our Broken Hill project where we're one of the largest ground holders around the world-class mine there, and that was actually. Listeners might not know, but we were one of the first seven companies in the first cohort of the BHP explore program, a world recognized program to help fund juniors in association with BHP. That was a fabulous experience and that was pushing forward our Broken Hill project. So that will probably also go out the door as a joint venture I'm always keen to maintain equity in my projects because I still have great belief in them. We can only do so much. And then we've got a few smaller deals lined up on some of our other projects. So we're progressively rationalising, but keeping going with with Arkun, so that sometime next year assuming the PFS goes all according to plan and so far it is then we'll look to do something with Arkun and get exclusively focused on Lake Hope.
Andrew Musgrave:
All right, plenty going on. I think, just to wrap things up, are there any sort of key messages you would like to put out to the market to see how 2024 will unfold?
Dr. Michael Jones:
So our key target is to get to the successful end of the pre-feasibility study.
Dr. Michael Jones:
That will really put us on a firm footing then to head towards mining over the next couple of years. And look, one of the key drivers for all of this is that high-purity alumina has two main uses. One is in batteries basically stops them exploding because it's thermally inert, and if you recall, the Samsung phones were exploding a few years ago and also the Tesla batteries catching on fire. The HPA in there stops that happening, and that's obviously a big growth market. And the other big market is actually in LEDs, both in light globes and in things like your smart screens, your OLEDs, your ULEDs, micro LEDs and increasingly, as I mentioned, in sapphire glass and also in semiconductors. So really there's a lot of that is part of the energy transition we're going through, and so it's not a widely known mineral high-purity alumina, but it's actually a crucial part of that whole megatrend, and so we're in the start of a trend that's going to grow at about 20% a year over the next decade, and so we're hopefully perfectly poised for significant growth from 26, 27 onwards.
Andrew Musgrave:
Yeah well, Mike, thanks for your time today. There's obviously plenty going on. It's been great to chat and we look forward to further updates from Impact Minerals in the coming months.
Dr. Michael Jones:
That's great. Thanks, Andrew.
Andrew Musgrave:
That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.