Alpha HPA Draws $27M from $30M QCMBTF Royalty Investment for Stage 2

Government Funding Milestone

Alpha HPA Limited has reached a significant funding milestone by executing binding documentation with the Queensland Government's QIC Critical Minerals and Battery Technology Fund (QCMBTF). This agreement revises the terms of a $30 million royalty investment, with $27 million already drawn down to finance Stage 2 of the company’s flagship HPA First Project and to support general corporate activities. The remaining $3 million was used to repay an existing production facility loan.

These funds are critical as Alpha HPA advances the development and construction phases of its high-purity alumina (HPA) and sapphire glass projects, both strategically located in Queensland. The QCMBTF’s support underscores the Queensland Government’s commitment to fostering critical minerals and battery technology industries within the state.

Strategic Partnerships with Australian Government Lenders

Alongside the QCMBTF funding, Alpha HPA is progressing a substantial $400 million senior debt financing package with Export Finance Australia (EFA) and the Northern Australia Infrastructure Facility (NAIF). While contractual close has been reached, the company continues to satisfy remaining conditions precedent to achieve financial close. Importantly, intercreditor principles have been agreed upon between QCMBTF and these lenders, ensuring coordinated financing terms.

Both EFA and NAIF have expressed strong support for Alpha HPA’s projects, highlighting their alignment with national priorities such as the critical minerals strategy, clean energy transition, and regional economic development. This multi-layered government backing positions Alpha HPA as a key player in Australia’s emerging critical minerals supply chain.

Royalty Structure and Production Targets

The QCMBTF investment is structured as a royalty deed with payments linked to production milestones. Royalty rates vary between 0.75% and 1.5% of gross revenue from the HPA First Project and sapphire production, depending on whether specific production targets are met. These targets include achieving sapphire production capacity of 81,000 kilograms per annum and exceeding 15,000 tonnes of product sold over any four consecutive quarters.

The royalty payments will cease once an aggregate of 200,000 tonnes of product has been produced and sold, providing a clear cap on the total repayment. Additionally, Alpha HPA will issue 20 million unlisted options to QCMBTF, exercisable at $1.00 per share over four years, aligning investor interests with the company’s growth trajectory.

Implications for Alpha HPA and Queensland

This funding package not only secures the capital necessary to advance Alpha HPA’s projects but also cements its footprint in Queensland’s critical minerals sector. The company’s Managing Director, Rob Williamson, emphasized the importance of this milestone and the ongoing support from government partners. The projects are expected to contribute significantly to Queensland’s economy and Australia’s broader clean energy ambitions.

With government-backed funding and a clear path to financial close on senior debt, Alpha HPA is well-positioned to deliver on its development plans. However, execution risks remain, particularly around meeting production targets that influence royalty payments and overall project economics.