Suvo Strategic Minerals Ltd invests in green HPA technology

Suvo Strategic Minerals Ltd (ASX: SUV) has signed a binding subscription and option agreement to acquire a 26% stake in Dingo HPA Pty Ltd, an Australian proprietary company aiming to produce high purity alumina (HPA) from recycled raw materials.

A private placement will see SUV acquire 220,000 fully paid common shares of Dingo, at an issue price of $1.00 per share.

In addition to the placement, Dingo grants Suvo a clear path to acquire up to 76% of the company’s issued capital.

This transaction offers the company the opportunity to develop a new green HPA process, delivering significant environmental benefits through a closed-loop recycling process.

Notably, the global HPA market was valued at USD 1.3 billion in 2019 and is projected to reach USD 4.8 billion by 2026, growing at a CAGR of 20.7%.

“Resilient and durable product”

Suvo’s Executive Chairman, Henk Ludik, said: “The decision to acquire an initial 26% stake in Dingo is consistent with Suvo’s commitment to build a resilient and sustainable commodity supply from its industrial minerals and its new industrial processes.

“The staged structure allowing Suvo to increase its stake in Dingo presents a low-risk approach for shareholders as we prove Dingo’s proprietary technology to produce this critical mineral.

“Recent market reports show that demand for HPA in powder form is expected to reach 187,000 tonnes per year by 2028, with this growth likely to be limited by supply limitations, leading to potential price spikes. as supply struggles to keep pace with demand. .

“HPA is a by-product of 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 lower carbon footprint, compared to traditional HPA production, and take advantage of rising demand and prices.

“We look forward to providing shareholders with further updates on this unique market opportunity as the project progresses.”

Use of funds

The initial financing of the placement must be used by Dingo for the advancement of the scoping study and general working capital.

At the end of Stage 3, Suvo will have an exclusive period to negotiate an equity purchase acquisition of the remaining issued shares in Dingo, subject to listing rules and any other regulatory approvals.

Dingo’s intellectual property is at the concept study level and Dingo intends to use the funds from the placement to support the advancement of a scoping study, as well as for general working capital.

The scoping study was designed to assess the technical and economic viability of the flowsheet proposed by Dingo to produce HPA and to validate the feasibility of a potential short-term project.

“Positive environmental results”

Dingo Director Dan Fraser said, “We are delighted to enter into this partnership with Suvo. Dingo and Suvo share the same strong commitment to producing critical minerals with positive environmental results.

“HPA is a dirty business, and we intend to clean it up. Our intention is to change market dynamics and give HPA consumers a green alternative.

“Dingo aims to be an ESG leader and a significant global producer of green HPA for the rapidly growing lithium-ion battery and LED lighting markets.”

HPA market

HPA is a critical, high-value ($28,000-$40,000 per tonne), high-margin, and high-demand mineral used in the production of lithium-ion batteries, portable electronics, electric vehicles, and of LED lamps.

It is also a key material in the production of synthetic sapphire, which is used to make substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire crystal used in optical windows and electronics, such as smartphones.

Several factors are contributing to the expected growth in global HPA demand, including the global adoption of LED lighting, smart technology, and the growing market for electric vehicles.

The Australian Federal Government recently added HPA to the list of Critical Minerals under the Critical Minerals Strategy 2022, citing wide-ranging economic and strategic importance.

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