Andromeda Metals Reports $3 Million Cost Savings and Pilot Plant Assembly Progress

Great White Project Early Works Reduce Funding Needs

Andromeda Metals (ASX:ADN) has successfully wrapped up Early Works activities at its Great White Project (GWP), marking a crucial step in advancing the development of Stage 1A+. The completion of bulk earthworks, grade control drilling, and site preparation has not only enhanced project readiness but also reduced the equity funding required for a final investment decision (FID). The processing plant pad area is now complete, with long-lead equipment such as the thickener and filter press arriving in Australia and being stored on site.

This progress follows the company’s recent capital raising that enabled these foundational activities, which included environmental compliance payments and the lodgement of a $3.79 million rehabilitation bond. The Early Works have provided valuable operational insights under real site conditions, effectively de-risking the construction schedule and trimming the funding gap. This development builds on the momentum from the company's Great White Early Works completion announced earlier in April.

Funding Challenges Amid Middle East Geopolitical Turmoil

While Andromeda has advanced negotiations with a Middle East-based cornerstone investor for asset-level equity funding covering both the GWP and the High Purity Alumina (HPA) Project, the process has stalled due to recent geopolitical developments in the region. The investor has been materially impacted by the conflict, causing delays and injecting uncertainty into the timing and completion of the transaction. The company remains engaged with this party but cannot provide a definitive timeline or assurance of closure.

In parallel, Andromeda continues to explore alternative funding pathways to maintain flexibility in progressing its project objectives. The company has also secured a credit-approved $75 million debt facility with Merricks Capital, though final execution depends on securing the balance of funding for Stage 1A+. To mitigate financial strain, cost-saving initiatives have been implemented, identifying approximately $3 million in savings across Early Works, procurement, and administrative expenses. These measures complement ongoing efforts to conserve cash, including directors accepting reduced or deferred remuneration. These financial dynamics echo the funding delays and cost controls reported in the prior quarter funding delays and cost savings.

High Purity Alumina Pilot Plant Nears Commissioning

On the High Purity Alumina front, Andromeda has made significant strides with the pilot plant assembly underway at the Streaky Bay site. The pilot-scale testwork aims to produce 4N HPA (99.99% purity) using a continuous process, a step up from previous batch processing. Equipment manufacture, testing, and delivery are complete, and assembly is in progress, with commissioning and first commercial sample production scheduled for the second quarter of 2026.

The pilot plant will not only validate Andromeda’s proprietary process but also produce amorphous silica by-product material, which is currently being evaluated for potential value-add. The company’s innovative approach allows flexibility in producing different HPA forms tailored to customer needs, a crucial factor for market acceptance. The HPA project’s advancement follows the positive economics demonstrated in the recent scoping study, reinforcing its role as a strategic growth pillar alongside the GWP.

Exploration and Corporate Developments

Exploration activities at the Eyre Kaolin Project have been deprioritised this quarter to focus resources on GWP grade control drilling and Early Works execution. Andromeda holds a 51% interest in the Eyre Kaolin Joint Venture, with the option to increase to 80% by 2027 through further exploration expenditure.

Meanwhile, the company has divested its gold and copper assets, with tenement transfers for the Wudinna Gold and Moonta Copper Gold Projects completed post-quarter. Cash reserves stood at $5.2 million at quarter-end, down from $10.1 million, reflecting expenditure on Early Works and pilot plant activities. An expected $1.6 million R&D tax refund related to 2025 eligible expenditure offers some near-term financial relief.

Andromeda’s financial prudence is underscored by directors’ willingness to accept zero exercise price options for remuneration until the project is fully financed or mid-2026, pending shareholder approval. These measures aim to stretch the company’s runway while navigating uncertain funding conditions.