What Investors Need to Know About Collerina’s HPA First Project?

  • Nov 20, 2018 AEDT
  • Team Kalkine
What Investors Need to Know About Collerina’s HPA First Project?

On November 20, 2018, Collerina Cobalt Limited (ASX: CLL) came forward and published a pre-feasibility study presentation related to the HPA first project. As per the press release, the HPA or High-Purity Alumina First managed to deliver the compelling business case and can deliver 10,200 tonnes per annum of 4N HPA or High-Purity Alumina in the improving HPA market. The press release also contains information related to the HPA First’s financial metrics. The HPA price assumption has been estimated at 33,333 per tonne, and annual revenues including the by-products is estimated at A$384 million. The management of the company stated that the project is financially robust.

As per the presentation issued, if the price of HPA declines from US$25,000/t to US$10,000/t, the EBITDA or earnings before interest, tax, depreciation and amortization would be A$47.1 million per annum. However, if the price of HPA witnesses a rise US$25,000/t to 40,000/t, the EBITDA would be A$513.8 million per annum. However, the company has also given the impact of the foreign exchange rate fluctuations. If the exchange rate from Australian dollar to US dollar rises from 0.75 to 1.0, the EBITDA would be A$162.1 million, and if the exchange rate from Australian dollar to US dollar fall from 0.75 to 0.5, the EBITDA would be A$417.1 million. The management of the company stated that strong financials have been helped by the Solvent Extraction or SX process. The company is focused on unique, proprietary as well as innovative process approach to the production of HPA. The company has also used the solvent extraction process. 

Planning to Change the Name

In the presentation, Collerina Cobalt has also stated that they are planning to change their name to “Alpha HPA Limited” and it is looking forward to getting the shareholder approval in the annual general meeting or AGM. The presentation also contains the structure of the shareholders. Of the total shareholding, the top 20 shareholders comprise 70% while the BT Portfolio Services comprises 6%. However, other shareholders like PT Muara Mulya Propertindo, Permgold Pty Ltd (N. Seckold) as well as Budworth Capital comprises 19.5%, 12%, and 7%, respectively. The value of the HPA is generated from the physical properties of extreme hardness as well as chemical stability. The performance, as well as price of the HPA, fluctuates on the basis of crystal structure, product density, degree of purity as well as particle size as well as distribution.

Over the last six months, the stock has delivered a positive return of 11.72%. The company has a market capitalization amounting to $73.72 million. The last traded price or LTP of the Collerina Cobalt was A$0.130 per share.


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