The Australian hydrous kaolin producer and exploration company Suvo Strategic Minerals has publicized its plan to secure a 26% stake in low-carbon high purity alumina (HPA) production.
Through a private placement, the ASX-listed company will acquire a stake in Australian proprietary company Dingo, which intends to produce HPA from recycled aluminium feedstock. In order to complete the placement, Suvo will acquire 220, 000 shares at A$1 each.
Aside from the placement, Dingo will grant Suvo a clear path to acquire up to 76% of the company's issued capital. As soon as the Stage 3 earn-in period ends, Suvo will have an exclusive opportunity to negotiate a share purchase acquisition of Dingo, subject to further regulatory approvals.
A concept study is currently being conducted on Dingo's intellectual property (IP). In addition to general working capital, Dingo intends to use funds from the placement to advance a scoping study.
Henk Ludik, the Executive Chairperson at SUVO, said, “The decision to acquire an initial 26% interest in Dingo is in line with Suvo’s commitment to building a resilient and sustainable commodity offering from its industrial minerals assets and novel industrial processes."
“The staged structure for Suvo to increase its interest in Dingo presents a low-risk approach for shareholders as we prove Dingo’s proprietary technology to produce this critical mineral.”
He added, "Recent market reports show that demand for HPA in powder form is expected to grow to 187,000 tonnes per year by 2028, with this growth likely to be constrained by supply limitations, leading to a potential spike in prices as supply struggles to keep pace with demand."
"HPA is a commodity derived from kaolin production. Suvo has extensive operations in the development, production and sale of kaolin products and believes the acquisition will generate synergies with Suvo's existing technical and commercial expertise."
“Dingo’s bespoke IP offers a potential pathway for Suvo to produce a sustainable source of HPA with a low carbon footprint, compared to traditional HPA production, and take advantage of rising demand and prices,” said Ludik.
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