Andromeda clears 4N HPA pilot milestone as Great White funding gap remains

Continuous HPA production clears the 4N specification

Andromeda Metals Limited (ASX:ADN) has moved its High Purity Alumina project beyond laboratory-scale production, confirming 99.9986% purity from continuous pilot operations during the September quarter. Independent analysis by EAG Eurofins put the product above the 99.99% threshold required for 4N HPA, a result the company says supports further process optimisation, customer sampling and preparation of a pre-feasibility study.

The pilot plant has completed commissioning, with optimisation now underway. Andromeda plans to make samples available for customer evaluation in the December quarter while also assessing potential co-products including amorphous silica and gallium. The company says the pilot program is intended to generate data on process performance, product specifications, reagent use, recoveries and scale-up assumptions for the next study phase.

Traxys agreement opens a potential US sales route

The HPA work now has a potential commercial pathway attached to it. Andromeda signed a non-binding Heads of Agreement with Traxys North America for a possible five-year sales agency arrangement targeting indicative US sales of 2,000 tonnes per year. At an indicative price of US$20,000 a tonne, that would imply potential annual sales of about US$40 million, although the figure is based on market assumptions, excludes sales fees and costs, and is not a binding commitment.

The quarter's link

Andromeda's pilot-scale result follows its link, while the company says its South African patent grant, received after quarter end, is the first in a portfolio of national applications protecting its proprietary HPA and smelter-grade alumina process.

Great White is ready, but funding remains the decisive hurdle

“Photos of Filter Press components being loaded at port of origin.”

The Great White Project is described as development-ready after completion of pre-construction Early Works, including the transport and secure storage of long-lead equipment such as Filter Press components. Yet the project has not reached a final investment decision for Stage 1A+. Andromeda estimates that approximately A$40 million of additional equity is required, alongside a credit-approved A$75 million Merricks Capital debt facility whose final approvals and binding documentation remain outstanding.

That leaves the funding process as the central test for the kaolin development. Andromeda says it is in confidential discussions with several strategic counterparties about funding, strategic and corporate opportunities, rather than pursuing equity alone. The company has not disclosed the counterparties or potential transaction terms, saying only that discussions are progressing constructively.

Capital raising extends runway while new spending approaches

Andromeda raised A$3.044 million before costs through a Share Purchase Plan and placement at A$0.0059 per share, with 342 shareholders participating in the SPP. The proceeds helped lift cash and cash equivalents to A$4.302 million at 30 September, from A$3.196 million three months earlier. Net operating cash use was A$1.358 million and exploration and evaluation expenditure was A$503,000 during the quarter.

On the Appendix 5B calculation, the company reported estimated funding of 2.36 quarters based on quarter-end cash, unused facilities and relevant outgoings. The capital raising is intended to support the HPA project's pre-feasibility study, but the reported balance is modest against the much larger equity requirement still attached to Great White. Keith Pollocks also took over as chief financial officer during the quarter, replacing Pascal Alexander-Bossy.