PERTH (miningweekly.com) – ASX-listed Pure Alumina has made a C$25.75-million offer for privately held Polar Sapphire, which would allow the Australian company to fast-track its plans to start the commercial production of a 99.99% high purity alumina (HPA) in 2019.
Pure Alumina is offering C$13.75-million worth of company shares and a further C$12-million in cash.
Pure Alumina told shareholders on Thursday that the acquisition was expected to catapult the company into the ranks of global HPA producers by funding the construction of the first 1 000 t/y of HPA capacity using Polar’s patented process, with commissioning expected in early 2020.
Polar’s process underpins a low capital cost of $12-million per 1 000 t/y of installed capacity and a forecast operating cost of some $6 750/t, which is expected to make Pure Alumina one of the lowest cost producers in the world.
“The Polar acquisition aligns the rapid growth of the HPA market with Polar’s proven HPA process to deliver HPA production, sales and cashflow years sooner for the benefit of Pure Alumina shareholder,” said Pure Alumina MD Martin McFarlane.
“Exceptionally low estimated capital and operating costs means once the initial 1 000 t/y plant is established, strong forecast cashflows are expected to largely fund future expansions.
“The low funding requirements of this acquisition and the initial HPA production facility is a significant advantage when compared to other HPA projects.”
On the completion of the transaction, Pure Alumina would immediately start the process of building the initial HPA production facility, which will be located near Toronto, in order to use the skills and infrastructure that Polar has developed in the construction and operation of its pilot plant.
Initially, the HPA production is expected to be sold into the synthetic sapphire markets, where Polar has already qualified its HPA with several buyers. As production expands, future sales would be diversified into HPA coatings for battery separators in the electric vehicle market.
The transaction was subject to a number of conditions, including the completion of a due diligence and shareholder and regulatory approvals. Pure Alumina would also be required to raise A$30-million through a combination of debt and equity to fund the acquisition, construction and commissioning of the initial facility.
Pure Alumina would also progress with the planned sale of its gold assets.
The company in June last year announced its decision to test the market for its gold assets, in order to focus its attention on its high purity alumina assets.