Andromeda Metals Ltd (ASX:ADN) has signed a binding offtake agreement with Foshan Gaoming Xing-Yuan Machinery Co Ltd for the sale of high-quality kaolin from the Great White Project (GWP) in South Australia during the first five years of production into the Chinese market.
Foshan Gaoming Xing-Yuan Machinery Co Ltd is based in Foshan City, a major ceramics production base located in Guangdong Province, China.
The agreement covers supply and delivery of a total of 115,000 tonnes of Great White CRM™ over the five-year period and 5,000 tonnes of Great White KCM™90 in the first year of production.
Andromeda's shares jumped 10% to $0.022 intraday as investors reacted positively to the news.
Offtake furthers commercial strategy
ADN’s strategy for the Great White Project revolves around the asset’s core kaolin product portfolio, specifically the Great White CRM and Great White KCM90 kaolin products, which the company describes as having “world-class brightness, colour and aluminium-to-iron ratios”.
Targeting the high-quality ceramics market, Andromeda believes the market for their products represents a sizeable demand of 340,000 to 500,000 tonnes per year.
High-quality kaolin is in higher demand following the war in Ukraine, which halted exports of Ukrainian kaolin to the market, one of the world leaders for use in ceramic applications.
Further, there are currently no announced new high-quality kaolin projects (of more than 36.5% AI2O3) globally.
Foshan Gaoming has been extensively involved in the kaolin industry, since its founding in 2004, and manufactures a range of machinery and magnets for the processing of ceramics and rare earth markets, including end-to-end mineral processing solutions for kaolin.