Pure Minerals: Battery Material Refinery Could Be Constructed In Townsville

Pure Minerals Limited (ASX:PM1) today announced that Queensland Pacific Metals Pty Ltd had released positive result on the completion of scoping study on its proposed battery materials refinery in Townsville. The Queensland Pacific is a privately owned entity in which Pure Minerals has secured an option to acquire.

The scoping study returned estimated annual primary production of approximately 25,400 tpa nickel sulfate and 3,000 tpa cobalt sulfate for battery materials refinery in Townsville. The refinery is also expected to produce other valuable co-products, including alumina, hematite and magnesium oxide at the throughput of 600,000 wet tonnes per annum.

As per the company’s information, the purpose of this study was to evaluate the feasibility of constructing a battery materials refinery that will process nickel-cobalt ore sourced from third parties via an ore supply agreement to produce battery-grade nickel and cobalt sulfate.

PM1 Chairman Eddie King stated “The company is very excited with the results of QPM’s Scoping Study which highlights potentially significant value for PM1 shareholders. Combining this study with the recent appointment of Top Resources Group, the team can now begin to market the project’s investment metrics to potential offtake parties and strategic parties.”

The scoping study was reportedly compiled with Queensland Pacific Metals Pty in assistance with lead consultant Boyd Willis Hydromet Consulting. Based on the assumptions and concept level design work undertaken in the Scoping Study, QPM has further confirmed the commercial potential of the project. QPM now intends to proceed towards conducting further feasibility studies, completing an extensive metallurgical test-program and obtaining the necessary environmental and other regulatory approvals for the Project.

Besides being well-supported by existing infrastructure, Townsville has been reported to have direct access to consumables required to operate the refinery and skilled labor. The company told that Nitric acid supply is available from nearby Gladstone and sulphuric acid is produced locally in Townsville. The scoping study has identified many locations which are potentially suited to the construction of a refinery in Townsville.

Nickel and cobalt sulfate are essential chemicals for the burgeoning battery industry and electric vehicle market. Most of the world’s cobalt is currently supplied from the Democratic Republic of Congo, but now QPM plans to market its products from a stable platform within Australia. The study has estimated an annual co-products production at circa 221,000 tpa hematite, 8,700 tpa alumina and 4,600 tpa magnesium oxide. The company stated that Co-products are of significant value to the Project hematite and alumina.

Annual operating cost was estimated to A$108 million whereas, construction capital cost has been projected at US$297 million which includes a contingency of US$65 million. Both, potential capital and operating costs, were reviewed by lead consultant BWHC.

In today’s trading session, PM1 shares surged up by 6.25% to last trade at $0.017 on 21 January 2019. The stock price has witnessed a negative performance change of 23.81% over the past 12 months. But in the last three months, it has gone up by 33.33%.

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