Next Investors logo grey

American Pacific Borate lowers opex & increases revenues

Published 27-JUN-2018 13:05 P.M.


3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

American Pacific Borate and Lithium (ASX:ABR) today updated the market on its progress commercialising the Fort Cady Borate and Lithium Project in Southern California, USA.

Onsite testworks are progressing nicely, with boric acid being recovered from the commercial-scale cavern.

Encouragingly, operating costs per tonne of boric acid is expected to be reduced with an optimised design philosophy and better than expected heat retention within caverns.

This reduction will be achieved through the addition of cogeneration to decrease energy costs, solvent extraction and the flow through reduction of a set of crystallisers. The resulting process plant will also allow for a wider range of boric acid head grades.

ABR’s onsite testworks and bulk sampling program is ongoing and designed to: test the scoping study flowsheet; obtain bulk samples for equipment sizing; progress detailed engineering in preparation for the start of construction, and obtain product samples to provide to potential customers and partners.

Onsite infrastructure for current commercial scale cavern testworks at Fort Cady:

Next Investors Image

In parallel with ongoing testworks, ABR is also exploring options to sell by-product gypsum into the expansive Californian agricultural market. The US gypsum soil amendment market initially estimated at US$30 to US$40 million per year by the company’s US-based fertiliser consultants, Context Inc.

However, the size of the market share ABR can secure remains to be seen at this stage, so if considering this stock for your portfolio do your own research and seek professional financial advice.

As an agricultural product, gypsum is generally applied to soils in areas where sodium levels are high to neutralise the effect of sodium on crops. It is also applied in areas where calcium levels are low, or to crops that require calcium for their growth like tomatoes and peanuts. Gypsum is also widely used in the construction of walls and ceilings in the construction industry. Boron-based gypsum improves product performance, user convenience and process efficiency.

Recent positive discussions with local gypsum suppliers have been encouraging, suggesting that ABR should be able to sell gypsum into local markets and that its enriched boron gypsum will be highly sought after. The sale of by-product gypsum is also likely to result in minimal waste products from the operations.

Interestingly, Context Inc.’s recently commissioned study into US micronutrient markets for boron and SOP also found that boron is the second most used micronutrient by value and that its annual micronutrient value is expected to grow by a strong 9 per cent CAGR through to 2022.

This study reinforces ABR’s North American specialty fertiliser market target and echoes the view that its boron fertiliser and boron-enriched gypsum will very much coveted in both local Californian and wider US domestic markets.

Next Investors Image

On top of this, ABR’s definitive feasibility study (DFS) is on track for completion in the second half of the calendar year.

ABR will also be lodging its air quality permit application in the coming weeks to enable commencement of construction, subject to financing.

ABR CEO, Michael Schlumpberger, said: “We are very pleased with the progress of the onsite testworks. We are also pleased with the initial results of the value engineering program as part of our DFS showing we can reduce opex by around 10% whilst providing for a wider range of head grades.

“In addition we now believe that we can sell by-product gypsum into the Californian market which will increase by-product credit revenue and reduce capex and opex associated with tailings facilities. We are now in an exciting position to be targeting an operation that produces minimal waste products,” added Schlumpberger.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.