Andromeda Metals Ltd (ASX:ADN) has passed a key regulatory milestone by securing approval for the Program for Environment Protection and Rehabilitation (PEPR) for its Great White Halloysite-Kaolin Project (GWP) from the South Australian Department for Energy and Mining (DEM).
The PEPR is the second and final stage of the South Australian Government’s two-stage regulatory process and is a significant step forward in the development of the GWP.
As a result of this approval, ADN shares have been as much as 24.4% higher intraday on the ASX to A$0.051.
Becoming “globally significant producer”
Andromeda managing director James Marsh said: “We are very excited to have received approval of the PEPR as it brings Andromeda closer to becoming a globally significant producer of halloysite-kaolin products."
Notably, approval of the PEPR permits the processing of up to 300,000 tonnes per annum of ore, producing up to a nominal 150,000 tonnes of halloysite-kaolin products from the GWP.
Moving forward, the new permit authorises the staged development of the GWP’s planned operations and anticipated production during the first 13 years of the mine’s expected 28-year life-of-mine.
Towards construction
“With this important regulatory milestone now achieved, Andromeda is poised to progress towards construction, as we advance funding discussions which will enable a final investment decision," Marsh said.
“We are pleased to have satisfied the comprehensive environmental conditions required by DEM and look forward to building on the strong relationships we have developed with the local Eyre Peninsula community and delivering long-term benefits to our shareholders and the region.”
Project location map showing mining lease (ML 6532) and miscellaneous purpose licences (MPL 163 & 164)
What is the process?
South Australia has a two-part assessment and approval process for mining operations, first requiring granting of a mineral lease and, secondly, approval of a PEPR before mining and processing operations may begin.
The DEM granted Mining Lease 6532 to Andromeda on December 17, 2021, along with two supporting miscellaneous purposes licences (MPL 163 for a water pipeline and MPL 164 for an access road).
The PEPR, which addressed the mining lease conditions attached to ML 6532 and MPL 164, was developed following extensive stakeholder engagement, independent expert audits and comprehensive studies undertaken to incorporate designs and management plans.
It includes environmental management plans for GWP and details how Andromeda has proposed to comply with the mining lease conditions.
Andromeda must also pay a bond of $3.79 million to secure the rehabilitation liability before it can commence any operations on the mining lease plus approximately $665,000 into the Native Vegetation Fund.
The company also expects to receive minor secondary approvals, such as EPA works approval, which are not required prior to the commencement of construction.
What’s next
While awaiting the approval of the PEPR, Andromeda progressed the staged, scalable approach to developing the GWP, and ramped up its preparedness to deliver the project.
Front End Engineering Design (FEED) and supporting construction plans for the Stage 1A are ready to progress with early-stage site preparation works.
With the PEPR now approved, these early-stage works are anticipated to proceed in the coming months, including land clearance, road works, fencing installation and on-site facilities.
During this time, Andromeda will continue to refine the project’s budget, schedule and technical designs ahead of an anticipated final investment decision (FID).
Furthermore, the procurement of stage 1A long lead items is continuing, and the company is preparing for the delivery of all long lead items by late 2023.