Located near the world’s largest silica sand mine in North Queensland, Diatreme’s Galalar Silica Project is capable of producing premium-quality silica for the fast-growing Asian solar panel market.
High-purity silica sand has become an increasingly strategic resource due to its usage in photovoltaic panels and other high-tech applications.
Similarly, increasing demand from Asia’s infrastructure and automotive sectors for mineral sands has added to the positive outlook for Diatreme's Galalar project (part of the Cape Bedford EPM), which is favourably positioned to access these growing markets.
Significantly, Diatreme is working in genuine partnership with the traditional owners, Hopevale Congress (12.5% project interest), to ensure the community receives the full benefits from the project's potential.
A scoping study released in September 2019 highlighted the project's potential to generate strong returns for all stakeholders:
* Pre-tax nominal NPV $231 million
* IRR (internal rate of return) of 150%
* Estimated capital payback within 8 months; start-up capital $24.4m
* 15-year mine life, producing 750,000 tonnes per annum based on a 79% recovery rate.
Diatreme has signed two MOU agreements for offtake from the project, including with China's Wan Zhong Investment Group, a Hong-Kong based group that supplies major glass manufacturers in China, and with Fengsha Group, China's largest processor and supplier of photovoltaic (solar) and specialty high end silica sand.
Both agreements may be scaled to reflect targeted production output and are subject to detailed negotiations and binding agreements.
In May 2019, Diatreme announced a maiden Indicated Resource for the Galalar project, comprising 21.5Mt > 99% SiO2, with total resources (Indicated and Inferred) rising to 30.2Mt > 99% SiO2, with a new satellite deposit identified at West Nob Point.
This resource has subsequently been further expanded in 2020, with a Maiden Measured Mineral Resource estimated comprising 30.9Mt > 99.28% SiO2 and the total Mineral Resource estimated at 47.5Mt.
Bulk testing results have confirmed the project's ability to produce a world-class silica sand product at 99.9% SiO2, meeting the requirements for high-end glass and solar panel manufacturing, capable of attracting premium prices. Significantly, testwork has demonstrated the Galalar silica sand product can be upgraded to "ultra-low iron" (sub 50ppm Fe2O3), attracting even higher prices.
In December 2019, Diatreme lodged a Mining Lease Application (MLA) for the project encompassing an area of 523 ha, including all of the identified Mineral Resource. This was followed by the lodgement in February 2020 of an application to undertake a voluntary Environmental Impact Statement (EIS).
In April 2020, an independent economic study by Cummings Economics showed the Galalar project's potential to deliver significant benefits to the Hope Vale/Cooktown region:
* Approx. $23-$24 million expenditure in construction phase and up to $42m in operation
* Total employment including flow-on effects of around 110 (equivalent full-time positions)
* Hope Vale households to see income gain of up to 68%
* Government royalties of around $1.5m and over $10m in company tax
* Operation to become Hope Vale's largest employer outside Hope Vale Aboriginal Shire Council.
Diatreme's preferred logistics solution is for shipping from a purpose-built barge ramp at Nob Point (3.6km from mine site), with transhipping occurring within the Cape Flattery designated port area. The Company is seeking Queensland Government approval for this solution, which would minimise community impacts.
Subject to regulatory approval, financing and offtake agreements, construction could begin as early as 2022, with the project expected to supply Asia's fast-growing solar PV market.
- One of the largest high purity silica exploration land packages in Australia, covering an area of 542 sq km in Queensland’s Eastern Cape York region, around 200km north of Cairns
- Cape Bedford EPM17795 covers a large Quaternary sand dune field, part of which is currently being mined by Mitsubishi Corporation subsidiary, Cape Flattery Silica Mines Pty Ltd and is the world’s largest silica sand mining operation
- Closest proximity high-grade undeveloped project to the world’s largest silica markets in China, Japan, South Korea and Taiwan
- High-grade silica used in glass manufacture, foundry casting, electronics, ceramics and construction – industries in demand and growing in developing Asia, with the market expected to expand at a compound annual growth rate of 7.2% through to 2022, reaching revenues of US$9.6 billion (source: IMARC Group)
- The global solar PV glass market is seen growing to US$48.2 billion by 2025, up from US$3.3 billion in 2016, amid strong demand from the Asia-Pacific region (source: Bizwit Research & Consulting)
- Estimated pre-tax nominal NPV of $231m and IRR of 150%; potential to deliver around 110 new jobs for the Hope Vale/Cooktown region.