WA Kaolin Secures A$7 Million To Upgrade Wickepin Plant

WA Kaolin Ltd (ASX: WAK) has secured firm commitments to raise ~A$7 million through a placement of shares at A$0.06 a share.

The company will also conduct a share purchase plan to raise up to $0.5 million from eligible shareholders on the same terms.

The new funds will allow WAK to install and commission US-sourced classifiers at its Wickepin Kaolin Project in Western Australia.

Interestingly, the issue price of A$0.06 is at a substantial 42.9% premium to yesterday’s close of A$0.042.

Wickepin Kaolin Project

WA Kaolin operates the Wickepin Kaolin Project which has an ore reserve of 64.9 million tonnes of kaolinised granite.

The plant was commissioned in October 2022 and is currently running for 4-5 days per week.

The production rate at Wickepin is 200,000 tonnes per annum producing coarser grade; however global demand is for the finer grade of products.

Upgrade to finer grade

WAK identified a classifier equipment supplier in the US who can supply equipment that can produce even finer products than WAK’s target size.

Total capex for this project will reach circa A$3 million once the WAK team and local contractors add in the ancillary works, expected to be operational by Q4 CY2024.

This will allow the plant to reach nameplate capacity of the finer grades at 25,000 tonnes per annum.

Support from offtake partner

In August 2023 WAK signed an expanded offtake agreement with Stanco International Corp.

The new agreement aims to bolster the original 2020 agreement that had supply totalling 338,000 tonnes over 6 years.

Managing Director Alf Baker said: “We are very pleased to have the Company’s biggest offtake partner, major shareholders and others commit funds in support of the company as we execute our strategy to produce premium finer grades of kaolin at our Wickepin plant.”

 

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