Andromeda Metals Share Price Lifts 7.69% on Back of Research Deal

Andromeda Metals Limited [ASX:AND], which is currently engaged in gold, lithium and copper exploration in South Australia, is up 7.69% at time of writing.

Currently, Andromeda Metals share price stands at a 52-week high of 14 cents.

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Everything’s coming up Halloysite

Part of the attraction of Andromeda Metals is their focus on HPA, or high purity alumina. Only in Andromeda’s case, as an aside to HPA, they are working with a variant known as halloysite kaolin — a derivative used in a range of industrial applications including as a ‘catalyst for breaking down petrochemicals and to produce carbon nano-structures for the battery industry.

Halloysite commands a small, emerging market, but CEO James Marsh is confident in the resource thanks to a 24 million tonne Poochera deposit in SA. As Marsh points out, Andromeda is ‘different to the other ASX companies because halloysite is valuable in its own right.

The material commands a price of US$100–150 per tonne (US$500 when processed) and is highly sought-after by Chinese producers of ceramics.

Andromeda recently struck a deal with Minotaur Exploration Ltd [ASX:MEP] to collaborate in the commercial development of new technologies using halloysite. The joint venture will see Andromeda earning up to 75% from Minotaur once they achieve a 51% stake in Poochera.

What’s so special about Halloysite, anyway?

There has been a building interest in halloysite production, with an increase in global research in the last few years. It could potentially be used as anything from medicine to water purification to nano-templating.

Instead, Andromeda’s long-term plan is to become a low-cost producer of HPA lithium ion batteries, presumably as part of the theoretical EV boom. Given the renewed interest from China and Japan in halloysite kaolin, Andromeda likely sees this (at the very least) as a good source of short-term cash flow.

It might be an idea to keep an eye on Andromeda, given that they are quickly becoming a top producer, while global production of halloysite continues to decrease. With any luck, a few more deals might come their way.


Ryan Clarkson-Ledward

For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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