Andromeda Metals Ltd (ASX:ADN) is trading higher on signing a legally binding offtake agreement with Vietnam and Hong Kong-based Asia Minerals Resources (AMR) to supply halloysite-kaolin from the Great White Kaolin Project in South Australia into the strong and high-value Asian ceramics industry.
Under the agreement, the company will produce and supply up to 38,500 tonnes of the KCM™90 product over the first three years of operation at a price in excess of the definitive feasibility study pricing.
This includes sales into the ceramics sector covering Vietnam, Malaysia, Singapore, Bangladesh, India, Pakistan, Philippines, South Korea, Indonesia, Thailand and the UAE.
What’s more, negotiations are in progress to lock in strategic offtake agreements for the balance of the initial Great White plant output to further de-risk the project.
“Significant milestone”
Andromeda managing director James Marsh said “This agreement with AMR is a significant milestone for Andromeda as it is the first one for our initial Great White KCM™90 product with a leader in the world of high-quality ceramics which confirms the quality and value of the unique Great White resource.
“We look forward to a long and productive relationship with AMR.”
Investors have responded positively, sending ADN shares as much as 18% higher to $0.105 while the company's market cap is approximately $310.8 million.
Vitis-AMR cooperation
This agreement follows extensive product application testing carried out by AMR’s partner Vitis Joint Stock Company (Vitis JSC - VITIS®) at its ceramic testing centre in Vietnam.
Vitis JSC is an industrial supplies company focused on its core business of ceramic market development and distribution of associated industrial materials, machinery and equipment to support AMR, their sales arm.
It acts as a mineral link between suppliers and end-users through the professional networking of AMR, which has been the major channel of mineral export to the targeted regional markets since 2008.
The Vitis/AMR cooperation on commercial and R&D aspects of new products has led to the development of high-quality kaolin products for export markets in the region, with supply to the world’s top manufacturers in Tableware and Sanitaryware sectors for more than 12 years.
About Asia Minerals
With headquarters in Hong Kong, AMR has, since 2008, been a reputable supplier of high-performance kaolins and other white materials and ancillaries to the ceramic industry for the manufacturer of high-quality tile, tableware and sanitaryware.
AMR’s directors are based in Vietnam, China, Hong Kong, Thailand and Malaysia which gives it a broad base of rich ceramic experience from mining, processing, quality control and logistics to the end-use of finished products.
The company identified Andromeda and its KCM™90 product with at least 28 years of supply potential as a long-term partner to enable them to become the leading supplier of premium kaolin products in the ceramic sector.