ESG Minerals, a wholly-owned subsidiary of Latin Resources, has signed a binding agreement to pay $500,000 to Oar Resources for the 80-square-kilometre Gibraltar halloysite-kaolin project in South Australia.
Air-core (AC) drilling by Oar in 2021 identified areas of high-grade halloysite at Gibraltar. Along with ore from Latin’s Cloud Nine deposit in Western Australia, it will feed the company’s $3.2 million research project with crcCARE – a partnership of organisations dedicated to developing new ways of dealing with and preventing the contamination of soil, water and air.
The three-year project will investigate the potential uses of halloysite, an aluminosilicate clay mineral which is the natural form of very white kaolinite, in the reduction of methane emissions in the agriculture sector through feed additives for cattle.
Latin’s interest in Gibraltar was likely piqued when Oar’s drilling returned the highest grade of halloysite observed in any project in Australia, with multiple composite samples grading more than 30 per cent halloysite – the highest going 53 per cent.
Logging of drill chips by Oar also confirmed the presence of felsic granite basement, which the company interpreted to be the same granite complex underlying Andromeda Metals’ Mt Hope kaolin deposit that sits immediately to the south of Gibraltar.
Mt Hope has a mineral resource of 18 million tonnes of bright-white kaolinised granite and contains two sub-domains consisting of 1.6 million tonnes of ultra-bright high-purity kaolin and 600,000 tonnes of high-purity halloysite-kaolin. Andromeda says the high-purity domain shows exceptionally low iron contaminant within the bright-white kaolin, with halloysite levels ideally suited to some high-value markets.
Latin’s 100 per cent-owned Cloud Nine deposit, which is about 300km east of Perth, has also been matured to the point of a mineral resource estimate, with the indicated and inferred resource being 280 million tonnes of halloysite and kaolin. It includes an indicated 70 million tonnes of kaolin at an average brightness grade of 81.
The global kaolin market is worth about $6.1 billion, with the clay and associated refined products used in paper coatings, paint, ceramics and pharmaceuticals, in addition to high-tech applications in battery coatings in its high-purity form.
Latin’s news flow of late has been dominated by lithium-related revelations from its Brazilian projects.
The company’s last quarterly update quoted the Colina project as having an after-tax net present value of $3.6 billion, a whopping internal rate of return at 132 per cent and a total life of mine revenue of $12.6 billion with a free cash flow of $6.8 billion. The average life-of-mine annual production was quoted at 405,000 tonnes per annum of 5.5 per cent lithium oxide concentrate.
Last month, Latin raised $35 million through a placement of new fully-paid ordinary shares to accelerate its Brazilian exploration, with an expanded drill program planned for next year.
Now, with a newly-acquired kaolin-rich chunk of SA turf in its portfolio, the market awaits the next move by Latin and its subsidiary to mature the ground and develop the interesting angle of cattle feed additives as a methane gas solution.
The good intentions of that plan are far from being described as “on the nose”.
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