High Purity Quartz Limited (t/a Ultra HPQ)

Categories Securities, Mining / Oil / Gas Tenements
Sale Type Asking Price
Price Guide AUD $1,500,000
Status: Open

Summary:

Business Overview

Ultra High Purity Quartz Sand (UltraHPQS) is a critical and essential mineral used in the manufacture of Solar PV silicon wafers, Semiconductor silicon wafers and other specialty applications including fibre optic cables, electronic encapsulants (EMC), quartzware applications such as lighting and pharma/lab glass. The major industrial manufacture markets are US, China, Japan, Korea and Taiwan.

The end-use applications which therefore depend on a secure supply of Ultra HPQS are:
  • All Smart devices including Phones, TVs, Digital Platforms (Facebook, Amazon, Netflix, Google etc)
  • All fibre optic cables including for use in 5G networks
  • Electric Vehicles
  • All solar PV cells and modules and related renewable power generation
The end products manufactured using ultra high purity quartz sand are driving a cleaner and smarter future and are high growth, high value markets worth USD Trillions.

The only existing producing Ultra HPQS resource at Spruce Pine, NC, USA. The concentration of supply risk is a matter of national security, especially for semiconductor applications and especially in China. The development of a second resource in Australia will be welcomed in major manufacture markets and we target 33% global market share based on estimation that HPQ Ltd will be the lowest cost producer by a significant margin.

Based on recent interim test results, Ultra HPQ has modified its near-term project development plan and is now seeking to raise A$[1,500,000] to establish initial production and cashflow within 9 to 12 months. The recent test results demonstrate that UltraHPQ can achieve a product with potential initial export sales of unprocessed lump quartz into Low Alpha Filler Markets of between 10ktpa to 20ktpa.

This product requires only simple quarrying, crushing and screening and haulage to the sales point at Port of Townsville. The sales price is expected to be in a range of USD300 to USD400 per tonne, FOB Townsville. Using mid-point volume and price generates revenue of A$7million and estimated Ebitda of A$3million per annum.

We are continuing to undertake test work on finer grain sizes with the near-term potential for a further product suitable for the inner layer of solar grade crucibles. This product sells in a price range of USD6,000 to USD12,000 per tonne. The result of this further test work is due within 4 to 6 months. The costs of this additional test work is included in the A$1.5m use of funds.

The Low Alpha Filler product is a bonus to the overall project and is an addition to the solar grade sand products we seek to sell into solar and semiconductor manufacture markets. Work on development of these products will now be funded from the early stage cashflow from Low Alpha Filler sales.

Subject to achieving this new short-term goal, the remaining project is likely to be funded from the proceeds of an IPO once initial cashflow has been established.

The valuation of the standalone Low Alpha Filler cashflow is A$25m to A$30m (20 years, 10% discount rate).

At planned production the mine life is in excess of 40 years.

Capital Raise
  • The A$1.5m raise will be used for the following;
  • Road grading
  • Crush Pad and Stockpile and ancillary equipment and infrastructure
  • Higher grade product development
  • Working Capital
The raise is priced at $15m pre-money valuation representing a 50% discount to the early stage cashflow valuation.

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