ChemX Materials (ASX: CMX) has pulled in $1.1m from sophisticated investors to help fund the completion of its high purity alumina (HPA) pilot plant in Perth. The company will also look to raise another $500k from shareholders in a share purchase plan and ChemX directors will kick $65,000 into the raise.
The new stock will be issued at 4.8c per share and will be gift-wrapped with one free option for every two shares with a strike price of 9c a share with a three year term.
The company says it plans to use the funds raised under the placement towards completion of its HPA pilot plant that is already 80 per cent complete and early stage commissioning activities are now underway.
ChemX is planning to deliver the first 99.99 per cent (4N) HPA material in the second quarter of this calendar year and the company says it is well placed to take advantage of an expected increased demand for high purity alumina.
Its HiPurA process that was developed in-house, can produce both HPA and high purity aluminium cathode precursor salts for lithium-ion batteries.
Initial testing has indicated that the process is low cost and low in energy consumption, compared to alternative methods. One of its competitive advantages is that the HiPurA process is modular, scalable and is not tied to mine production, with the feedstock being a widely available chemical, albeit the company does not say exactly where it comes from.
ChemX is also applying its high purity expertise to advance its manganese project located on the Eyre Peninsula in South Australia. Metallurgical test work has indicated the ore is amendable to upgrade through beneficiation and being processed into a high-purity manganese sulphate to supply the lithium-ion battery industry.
High purity alumina is the common denominator in four specific markets, all of which are currently burgeoning. It is used as a separator for lithium batteries, arguably the biggest commercial opportunity out there right now.
It is also used in LED light globes and with a world now focused on replacing the old fashioned energy hungry light bulb with LED low energy versions, this market is also taking off.
The iphone, which has made an indelible mark on every continent across the globe is also a big user of HPA as its sapphire facias are largely made up of HPA.
The semi-conductor market is another market that is pretty much out of control right now and again HPA is a necessary part of that market.
If ChemX can bed down its proprietary process with the pilot plant and lock in a supply of raw materials, it may well find itself on the cusp of some of the largest global markets ever seen – now that sounds like a scalable proposition.
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