Impact Minerals - Unlocking the Potential of High Purity Alumina for the Energy Transition

• Impact Minerals is developing the Lake Hope High Purity Alumina (HPA) project in Western Australia, aiming to be a low-cost producer.
• HPA is crucial for the energy transition, with applications in lithium-ion batteries, LEDs, sapphire glass, semiconductors, and catalysts.
• Impact Minerals has two innovative processing routes, the sulfate process and the low-temperature (LTL) process, which offer cost advantages.
• The company is progressing through feasibility studies and plans to start marketing efforts by mid-2024, targeting the growing LED market.
• Lake Hope's unique characteristics, such as fine particle size and easy mining, provide natural advantages for low-cost HPA production.

High Purity Alumina (HPA) is an essential material for the ongoing energy transition, with applications in lithium-ion batteries, LEDs, sapphire glass, semiconductors, and catalysts. As the demand for HPA continues to grow, Impact Minerals (ASX: IPT) is well-positioned to become a significant player in the global HPA market with its Lake Hope project in Western Australia.

Unique Advantages of the Lake Hope Project

The Lake Hope project boasts several unique characteristics that give Impact Minerals a competitive edge in the HPA market. First, the deposit is located in the top two meters of a salt lake, making mining operations simple and cost-effective. Dr. Mike Jones, Managing Director of Impact Minerals, emphasizes the significance of this advantage: "Those natural advantages flow through not just for the mining, which is cheap and easy, but then into the processing, which gives us a straightforward method to get to the chemical purity."

Furthermore, the clay at Lake Hope's fine particle size provides a high surface area, allowing for efficient processing and extraction of HPA. This unique feature has enabled Impact Minerals to develop two innovative processing routes: the sulfate process and the low-temperature (LTL) process.

Interview with Managing Director, Dr. Mike Jones

Innovative Processing Routes

Impact Minerals has developed two processing routes that offer significant cost advantages compared to traditional HPA production methods. The sulfate process, designed by the company's geologist, Rolland Gottard, uses sulfuric acid to extract HPA from the clay. This process was the basis for the scoping study released in November 2023, which demonstrated that Impact Minerals could potentially be one of the lowest-cost HPA producers globally.

In addition to the sulfate process, the company has also developed the LTL process, which uses a different set of reagents and has the potential to reduce capital and operating costs further.

Dr. Jones explains, "We believe that this low-temperature process, the LTL process as we call it, will actually have lower, in particular, lower capital costs than the sulfate process. We've removed one stage of the process completely."

Growing Market Demand & Target Applications

The global HPA market is expected to grow at a compound annual growth rate (CAGR) of 20% by the end of the decade, driven primarily by the increasing demand for LEDs. Impact Minerals plans to target the LED market as its primary application for HPA, given the substantial growth potential in this sector.

Dr. Jones highlights the market opportunity: "If you look at the graphs in our presentations, that's where the largest growth is forecast to be. Something as mundane as all of these new buildings we're seeing completely covered in LEDs, every one of them's got a little sapphire wafer in them, which is made of HPA."

Upcoming Milestones and Feasibility Studies

Impact Minerals is currently progressing through feasibility studies for the Lake Hope project. The company aims to complete the pre-feasibility study (PFS) by the end of 2024, which will include a decision on which processing route to pursue for the 10,000 ton per annum HPA plant.

Following the PFS, Impact Minerals will commence the definitive feasibility study (DFS), expected to be completed by the end of 2025. The company is also planning to start marketing efforts by mid-2024, targeting potential end-users in the LED industry.

Conclusion

Impact Minerals' Lake Hope High Purity Alumina project presents a compelling investment opportunity in the rapidly growing HPA market. With its unique advantages, innovative processing routes, and focus on the expanding LED sector, the company is well-positioned to become a low-cost, significant player in the global HPA supply chain. As Impact Minerals progresses through feasibility studies and approaches production, investors should closely monitor this exciting opportunity in the critical materials space.

The Investment Thesis for Impact Minerals

• Impact Minerals is developing the Lake Hope High Purity Alumina (HPA) project in Western Australia, which boasts unique advantages such as shallow, easy-to-mine deposits and fine particle size, enabling low-cost production.
• The company has developed two innovative processing routes, the sulfate process and the low-temperature (LTL) process, which offer significant cost advantages compared to traditional HPA production methods.
• The global HPA market is expected to grow at a CAGR of 20% by the end of the decade, driven primarily by the increasing demand for LEDs, which Impact Minerals plans to target as its primary application.
• Impact Minerals is progressing through feasibility studies, with the pre-feasibility study (PFS) expected to be completed by the end of 2024 and the definitive feasibility study (DFS) by the end of 2025.
• The company plans to start marketing efforts by mid-2024, targeting potential end-users in the LED industry, positioning itself to secure off-take agreements and partnerships.
• Impact Minerals has a strong management team with extensive experience in the mining industry, led by Dr. Mike Jones, who has a proven track record of discovering and developing mineral resources.
• With its unique advantages, innovative processing routes, and focus on the expanding LED sector, Impact Minerals presents a compelling investment opportunity in the rapidly growing HPA market.

Macro Thematic Analysis

The global shift towards a more sustainable and low-carbon future is driving the demand for critical materials essential for clean energy technologies. High Purity Alumina (HPA) is one such material, with applications in lithium-ion batteries, LEDs, sapphire glass, semiconductors, and catalysts. As governments and industries around the world prioritize the energy transition, the demand for HPA is expected to grow significantly in the coming years.

The LED industry, in particular, is a major driver of HPA demand. With the increasing adoption of energy-efficient lighting solutions and the growth of smart screens and displays, the LED market is poised for substantial growth. This trend is further supported by government regulations, such as the ban on incandescent light bulbs in the United States, which will drive the demand for LED lighting and, consequently, HPA.

In this context, companies like Impact Minerals, which are developing low-cost, high-quality HPA projects, are well-positioned to benefit from the growing demand for critical materials. As Dr. Mike Jones, Managing Director of Impact Minerals, states, "HPA is a crucial part of the whole energy transition, which is one of the big themes that's driving the mining industry at the moment."