West Australian kaolin and silica sand resource company Suvo Strategic Minerals’ (ASX: SUV) has witnessed a spike in its share price today on news its acquiring Australia’s only significant kaolin mining, wet processing and manufacturing operations.
Its share price hit an intraday high on Monday of 19c, up 6c or 46%, with close to $2.5 million worth of shares changing hands by 1:55pm AEDT following news it had acquired kaolin operations in Victoria from French multinational Imerys S.A. for A$2 million.
The assets consist of three mining leases and a processing plant, located some 40km west of Ballarat, and have been producing and selling kaolin products since 1972. For CY2019, sales totalled A$13.0 million for 25kt of kaolin products sold and generated EBITDA of A$2.1 million.
Importantly for Suvo, there are significant synergies from experienced management, mining, process technicians, laboratory, sales and marketing personnel which will help build a robust team to assist in developing its flagship White Knight Kaolin project in WA.
This is a fantastic opportunity for our young Company to acquire Australia’s only significant wet producing kaolin operation,” Suvo Executive Chairman Robert Martin said.
“We will have access to Australia’s only experienced operational kaolin mining and wet processing personnel from whom we will learn tangible applications for our White Knight Kaolin project in Western Australia.”
Mr Martin said the company would continue to focus on its existing kaolin and silica exploration and resource definition activities in Western Australia where the company has recently completed drilling programs and expect to release the results later this calendar year.
“Overall, it’s been a rapid and sustained development for the company as we progress from a pure exploration company into a miner and producer,” he added.
Suvo is also seeking to raise A$6 million (before costs) via a conditional placement and has received strong institutional support.
Shares in Suvo was trading on Monday at 17c at 2:45pm AEDT.