Investor Insight

With a mining lease application underway and a scoping study that shows excellent economics, Impact Minerals’ game-changing, advanced Lake Hope high-purity alumina project makes for a compelling investment case.

Overview

Impact Minerals (ASX:IPT) is an exploration and development mining company focused on discovering and developing new resource projects within Australia. Lake Hope, a transformational acquisition by the company and its current flagship asset, is a high-purity alumina (HPA) project in Impact’s home territory of Western Australia, a tier-one jurisdiction.

This advanced-stage project allows the company to fast-track the asset toward development, firmly establishing the company on the road to production and increasing shareholder value.

HPA is a high-value product with various uses in several industries that are key to the transition to a low-carbon world. It is mainly used in LED lighting, micro-LED screens, and ceramic-coated separators in lithium-ion batteries. Both these markets are forecast to grow dramatically over the next decade, and a looming supply shortage is predicted for 2026.

HPA is also necessary for producing synthetic sapphire and scratch-resistant glass. With these ever-widening applications for HPA, demand for this resource is expected to grow from US$3.18 billion to US$12.21 billion by 2030 with a compounded annual growth rate of about 20 percent.

Lake Hope is the company’s current focus as it moves towards production, and where a very shallow, high-grade resource of HPA precursor material has been identified in the top two meters of a dry salt lake. The deposit has unique physical and chemical properties that will allow for inexpensive digging and mining, with transportation to a processing facility off-site in an established industrial area. This will accelerate the approvals processes required to get into production.

With a mining lease application pending, Impact aims to bring Lake Hope, which contains almost 1 million tons of potential HPA, into production when the forecast average price for 4N HPA (99.99 percent Al2O3) and related products is about US$20,000 per ton. The ‘4N’ designation indicates the purity grade, making it suitable for high-tech end uses.

Outstanding economics from the latest scoping study released by the company shows Lake Hope’s potential to be the lowest-cost producer of HPA globally by up to 50 percent.

Lake Hope has a maiden mineral resource estimate (MRE) of 3.5 million tons at 25.1 percent alumina (Al2O3) for a contained 880,000 tons of alumina. The company also received heritage clearances for the entire Lake Hope deposit further de-risking the project and providing another critical component in the company’s application for a mining lease.

Impact completed a bulk sampling and test pits program at the Lake Hope project in December 2023, and later reached a key milestone by producing HPA greater than 99.99 percent (4N) purity from the metallurgical processing of lake clays acquired from Lake Hope.

In February 2024, a new proprietary metallurgical process for producing HPA from the lake clays was identified. Impact produced 99.99 percent (4N) Al2O3 from a low-temperature leach (LTL) process. The LTL process may lower the capital and operating costs to produce HPA compared to the sulphate process which underpinned the recent scoping study. The LTL process will be included in the ongoing pre-feasibility study in parallel with the sulphate process at marginal extra cost to determine the best processing route to HPA. The PFS is due to be completed in late 2024.

The company is well funded to finance the pre-feasibility study at the Lake Hope High Purity Alumina project and exploration activities at the Arkun battery minerals project.

Impact Minerals has been awarded a $2.87 million grant for the commercialisation of its innovative process to produce High Purity Alumina (HPA) from the Lake Hope deposit. The grant is under the Federal Government’s Cooperative Research Centres Projects (CRC-P) program which fosters short-term, industry-led research collaborations. The grant is part of an estimated $6.4 million research and development project to be completed within three years and designed to provide Impact with the relevant information required to complete a definitive feasibility. A key component of the grant funding will be to construct a pilot plant, which is a key goal for 2025, and this will provide consistent material for off-take and qualification trials.

Impact Minerals was also one of the inaugural cohort of seven companies selected to be part of the prestigious BHP Xplor program. BHP Xplor, an accelerator program introduced by BHP in August 2022, is designed to help provide participants with the opportunity to accelerate their growth and the potential to establish a long-term partnership with BHP and its global network of partners.

The BHP Xplor funding was used to identify new target areas for copper and other energy metals around the Broken Hill area in New South Wales, eastern Australia, where Impact has been quietly adding to its ground position for several years.

Additionally, the company is exploring its large Arkun battery metals project, also in Western Australia which covers nearly 2,900 square kilometres. Three new exploration licence applications were submitted recently immediately north of the Arkun project along trend from the recently discovered REE soil geochemistry anomalies at Hyperion, Swordfish and Horseshoe, and the Caligula copper anomaly. These anomalies require drill testing which will occur in 2024 and is an exciting development in the emerging mineral province of southwest WA.

A strong management team with over 50 years of combined industry experience leads the company. With a mining and exploration geology degree, Dr. Mike Jones, managing director, launched a long career consulting and leading mining organizations. Peter Unsworth, the non-executive chairman, has more than 35 years of experience in multiple financial sectors, such as securities industries and wealth management. Paul Ingram, a non-executive director, has led several mining companies since 2003. Impact Minerals has the experience and expertise to lead the company to success.

Company Highlights

• Impact Minerals is an exploration and development mining company focused on rapidly moving its flagship Lake Hope high-purity alumina (HPA) project toward production.
• The Lake Hope project has a high-grade maiden mineral resource estimate (MRE) of 3.5 million tonnes at 25.1 percent alumina (Al2O3), for a contained 880,000 tonnes of alumina that can be converted to HPA.
• HPA is used throughout multiple industries, and the overall HPA market is projected to grow by a CAGR of 18.4 percent by 2030.
• A pre-feasibility study is currently in progress and scheduled to be completed by Q4 2024. A mining lease application for the Lake Hope High Purity Alumina (HPA) was recently lodged with the aim of being granted by 2026.
• The company’s project portfolio also includes assets with high-grade mineral deposits of a range of base, critical and precious metals.
• Impact Mineral’s 2,000-square-mile Arkun nickel-copper-PGE project in Western Australia has produced encouraging assays that motivate further exploration. Maiden drill programmes are planned for early 2025.
• The company is also exploring its Broken Hill copper project in New South Wales following a major grant under the auspices of the BHP Xplor program in 2023..
• A strong management team leads the company with experience in geology, mining and corporate finance.