Cauldron becomes ‘first mover’ with completed acquisition of Ashburton River sand licences

Cauldron Energy Ltd (ASX:CXU) (OTCMKTS:CAULF) (FRA:UFX) is looking to capitalise on its ‘first mover status’ in the global sand market, following the acquisition of three exploration licences at the mouth of the Ashburton River in Western Australia.  As previously reported by Proactive, Cauldron gained exposure to the international sand market last December, with a deal to buy high-quality river sand leases in WA.  The company told investors on Tuesday that it had made “significant progress” towards becoming a major player in that market, with the news that it is now registered as the 100% owner of three exploration licences and one miscellaneous licence at Ashburton River.  First-mover status Cauldron CEO Jess Oram said the company would benefit from its ‘first mover status’ and have early participation in a global growth industry. “Global usage of construction sand is estimated to be 10 times that of global bulk coal and 40 times bulk iron ore,” he said. “The transfer of ownership is a significant step towards our efforts to become a significant exporter of sand, which will allow us to take advantage of the huge global demand for this under-appreciated commodity.” Sand, you say? Yes, sand. The most mined commodity in the world, the United Nations estimates about 40 billion tonnes of sand is mined every year - in comparison, only 3.5 billion tonnes of coal is mined per annum. River sand, the object of Cauldron’s acquisitions, is often used in construction and has a high silica sand content, which is the most commonly used sand because of its abundance and low cost. Silica sand is used in the manufacture of concrete and glass in particular, and Cauldron is focused on concrete - last month it leased a concrete plant site as it aims to build a strategic presence in Onslow, Western Australia. The company is planning to re-commission a concrete plant to supply into upcoming projects in an anticipated construction and mining boom in this region of Western Australia. The sand market The acquisition gives the company the potential to tap into the international sand market, which is projected to be worth US$60 billion per annum by 2030. The river sand is near transport infrastructure and key Asian markets, representing a strategic opportunity while it can also be mined using an environmentally sensitive low cost and low-impact extraction method. “The scarcity of resource and increasing demand is expected to drive sand prices higher in the medium term; and the proximity of the leases to key Asian markets represents a significant strategic advantage,” Oram said. “We intend to target offtake in both domestic and international sand markets. “In line with this ambition, we are in the process of securing port capacity for initial export operations on its approved mining licence with capacity of up to 500,000 tonnes per annum of sand.” Other licences Cauldron is waiting on a number of other licences to come through, including at the Onslow and Gascoyne river mouths. The rivers drain a huge area of granitic rocks commencing from their respective headwaters all the way to the project area, being the mouth of the river. Every time there is a flooding event somewhere in the catchment area, sand is deposited into the project area, replenishing the supply of sand and re-establishing the river mouth in its original, pristine condition. Some river mouths are being ‘swamped’ from flooding events, with excessive sand build-up preventing the use of high-value infrastructure facilities, which adversely affect the economies of these regional economies.                                                                                                                                                                                                         - Daniel Paproth