WA Kaolin motors towards stage-one first production this year at Wickepin

WA Kaolin Ltd (ASX:WAK) is making strong progress with stage one construction at the Wickepin Kaolin Project and remains on track for the first production by the end of the year. The project, 220 kilometres southeast of Perth, has a 644.5 million tonnes mineral resource estimate including an ore reserve estimate of 30.5 million tonnes of kaolinised granite.  WAK’s intention is to produce kaolin products for tier-one customers with the aim of expanding production to 400,000 tonnes per annum (TPA) in a two-stage strategy. Project background The company acquired the Wickepin Project in 1999 from Rio Tinto which, through exploration, had discovered and drilled out a mineral resource and commissioned engineering and feasibility studies. This acquisition included the tenements covered by the Wickepin Project and all associated engineering and feasibility studies. Since then, WA Kaolin has invested more than $42 million to develop and progress the Wickepin Project that comprises a mining lease, a general-purpose lease, a miscellaneous licence and retention licences. It is one of the largest known remaining kaolin resources in the world and the probable ore reserve of 30.5 million tonnes is within a mineral resource of 109.1 million tonnes in the mining lease. The project also has an inferred mineral resource of 644.5 million tonnes of high-grade premium kaolinised granite across all tenements. WA Kaolin developed a dry processing method, the K99 Process, at its plant in Kwinana, which together with the high-grade Wickepin kaolin resource, produces an ultra-bright, high-quality kaolin product at a low cost. Stage-1 work AUSPAN, one of Australia’s leading steel frame construction companies, has been contracted to carry out the stage-1 building structural design and construction. The concrete batching plant was delivered to the site early in January and work commenced on the footings and part of the slab being laid ahead of the plant build. WA Kaolin has also purchased a Hyster reach stacker for export container handling operations at the Wickepin Project. The unit will initially be used at the company’s operating Kwinana plant to manage the increasing container traffic, before being transferred to the Wickepin mine site when operations commence at the end of 2021. Employing key staff During the quarter, WAK started employing key personnel for the Wickepin Project. Post period, the company appointed the Wickepin plant office administrator, who began employment on April 12.  Additionally, the company has reached agreement with an experienced sales and marketing manager to join the team in May. WAK has also engaged Matthew Baker, son of executive director Alf Baker, on contract as site construction manager to assist the mine manager as the project activity on site increases. Mining operations WAK’s existing mining and Kwinana processing operations will continue during the Stage-1 construction and commissioning at East Wickepin to service the strong demand of WAK’s growing list of customers. The Kwinana operation is producing at a rate of up to 5 tonnes per hour and strong orders continue.  Last year, WA Kaolin received its first commercial order for its new product CG-15, a granulated product provided for the ceramics industry, from Japan.  The CG-15 order was shipped to Japan on January 25. Subsequently, the company has received an order from an Australian paper manufacturer for IPG2-75, a new granulated product for the paper market. Offtake agreements WA Kaolin is also continuing marketing efforts to build on its list of existing customers in Australia, Japan, Vietnam and China who have signed contracts, LOIs and an offtake agreement. The company has in place letters of intent and ongoing contracts with key distributors and customers, which further support the company’s targeted production of kaolin. In years 1 to 3 of production at Wickepin, the sum of offtake agreements and non-binding letters of intent in place amounts to a total target offtake for the first three years of 551,000 tonnes, representing 83% of targeted production of 664,000 tonnes for those years.  Further offtake negotiations are in progress with other potential customers.