Investors set to Andover focus on what’s next in the project pipeline

Another week of great excitement and intrigue in Western Australia’s lithium sector has come to an end as bulls of this key battery material jostle to establish their next-generation supply pipelines.

Mineral Resources (ASX: MIN), the most advanced lithium producer listed on the ASX, rounded off the week with confirmation late on Friday that it had secured a 12.3 per cent stake in SQM’s takeover target Azure Minerals (ASX: AZS).

It adds to a crowded head table at Azure, which in addition to SQM (19.9 per cent) also counts the house of Hancock (18.3 per cent), the house of Mark Creasy (12.1 per cent) and the house of Wilhelm Zours (10 per cent), aka Delphi and Deutsche Balaton, as its largest investors – unless one of them sold to MinRes.

If MinRes picked up its stake from smaller investors, then that leaves about 73 per cent of Azure’s equity in the hands of just five investors. The free float is tightening up.

But it illustrates the long-term positioning underway for a project – in this case, Azure’s Andover lithium discovery in the Pilbara – that remains years from development.

St George Mining’s (ASX: SGQ) portfolio of early stage lithium exploration projects in and around the Goldfields is not as advanced as Andover – and there is no suggestion, just hope, that it will result in another Andover – though interest from strategic players to join St George’s hunt remains strong.

St George is finalising its latest “material corporate transaction”, having extended a trading halt to a voluntary suspension it hopes to exit in the middle of the week with the relevant announcement. St George’s partners already include some leading names in the battery world such as TDK subsidiary Amperex Technology Limited and Shanghai Jayson.

Takeover hype and market excitement make it easy to forget that the journey to developing a project takes time and often leads to a lull in headlines while the nitty gritty is being sorted.

VRX Silica (ASX: VRX), which has been patiently working through the approvals process for its Arrowsmith North high-grade silica sand project north of Perth, was able to announce a significant advance last week.

VRX has, of course, nothing to do with Azure – different commodity and different region of WA though its largest shareholder happens to be the Wilhelm Zours stable of German investment companies.

VRX has been patiently weaving its way through WA’s slow regulatory approvals process.

It is well-known and understood – though hardly appreciated – that there is a significant approvals lag in Australia’s most important mining State.

Last Tuesday, VRX announced a major update in its quest to secure environmental approvals for Arrowsmith North. Following a protracted to-and-fro period including a public review, VRX has finally been able to lodge its responses to public submissions received ahead of the regulator, the Environmental Protection Authority, deciding whether to recommend approval.

“We are pleased to have progressed to the next stage of the environmental approvals process for Arrowsmith North and appreciate the public interest in the proposal,” VRX managing director Bruce Maluish said.

“[Arrowsmith North] has the potential to underpin a project lasting many decades and underscores the enormous economic contribution that could flow to the Irwin Shire in particular and WA more broadly.

“We again thank shareholders for their continued patience as we have worked on securing the key approvals for Arrowsmith North.”  

In the scheme of proposed lithium ventures such as Andover, Arrowsmith North is a tiddler – but also capital-light and easy to bring into production.

VRX is updating a bankable feasibility study for Arrowsmith North, which has a mineral resource of 221 million tonnes at 99.5% SiO₂. The updated BFS is due before the end of this year.

Once regulatory approvals are received, VRX can finalise what remains strong interest from prospective silica sand customers.

Bricklaying robotics company FBR (ASX: FBR) is also cognisant of the patience shown by its shareholders.

The intellectual property that underlies FBR’s Hadrian robot is world-leading though the value of inventions listed on the ASX remains subject to the revenue – and profits – they generate.

FBR is completing construction of its first next-generation Hadrian X robot – the bricklaying machine installed onto a truck base – before shipping it to the US for commercial opportunities.

FBR said last week it had filed more IP applications to bring the total number of patent families covering the Hadrian X and associated innovations to more than 40.

“The IP developed during the design and manufacture of the next-generation Hadrian X is significant in providing FBR with a strategic moat and an ongoing commercial advantage as we begin to roll out our Wall as a Service operations in key international markets,” managing director Mike Pivac said.

“Our focus continues to be preparing the next-generation Hadrian X for deployment to the US. The execution of our IP strategy grants us the ability to effectively prioritise our development programs while securing the commercial opportunity for a broad range of applications well into the future.”

Like FBR, the still-unlisted NextOre is steadily advancing its technology – magnetic resonance sensors and real-time bulk ore sorting that allow companies to achieve more metal output from smaller plants with lower environmental impact – and last week secured the backing of century old German innovator Gebr. Pfeiffer.

In addition to Pfeiffer investing $5 million in NextOre, the two companies have signed a strategic cooperation agreement to explore opportunities to drive a step-change in efficient, environmentally friendly minerals processing.

Pfeiffer is world-renowned for its innovative vertical roller mill technology for dry grinding, which saves energy, delivers a uniform size reduction with a narrow particle size distribution, provides a high-reduction size ratio of up to 1000 and is highly flexible.

Add that to NextOre’s sensors and ore-sorting innovation and opportunities in the iron ore and copper sectors, for starters, are immense.

The first focus of NextOre and Pfeiffer’s collaboration will be on an integrated iron ore sorting and grinding solution for Brazilian and Australian iron ore producers. 

“NextOre is undergoing a phase of significant growth. Pfeiffer’s investment in our business is a strong endorsement of NextOre’s magnetic resonance technology and recognition of its game-changing potential in the global resources industry,” NextOre chief executive Chris Beal said.

“Like Pfeiffer, we are committed to creating solutions that our customers can rely on. We are excited to further prove NextOre’s real-world applications through this collaboration.”