Australasian Metals Limited Enters into an Option Agreement for Dingo Hole HPQ Project Amid Rising High-Purity Quartz Global Demand
The global shift from fossil fuels to renewable energy aims to reduce greenhouse gas emissions, ensure sustainable energy, and boost energy security. The Paris Agreement, a key climate milestone, unites nations to limit global temperature rise below 2°C above pre-industrial levels. Countries now target net zero emissions, increasing demand for High-Purity Quartz (HPQ) essential for semiconductors, solar cells, and advanced optics due to its exceptional purity and chemical properties. The high-purity quartz (HPQ) market is projected to grow from USD 672.93 million in 2024 to USD 847.46 million by 2029, at a CAGR exceeding 4.5% from 2024 to 2029.
Australasian Metals Limited (ASX: A8G) (“Australasian” or “the Company”), via its wholly owned subsidiary Pure Mining Pty Ltd, has entered into an Option Agreement with Darwin-based Verdant Minerals Limited to acquire a 100% ownership stake in the Dingo Hole High Pure Quartz Project. Growing industrial demand for HPQ witnesses the significance of this deal for the Company going forward.
Details of the Deal
- Option Fee: Australasian Metals Limited will pay an AUD 30,000 option fee to conduct due diligence activities during the four-month option period, starting from May 24th, 2024
- Fieldwork Commencement: Fieldwork is scheduled to commence after June 17th, 2024
- Geological Mapping and Sampling: During the option period, Australasian will conduct geological mapping and rock chip sampling to assess the project’s potential
- Exercise of Option: Australasian has the right to exercise the option by paying an additional AUD 270,000 cash to Verdant, thereby acquiring full ownership of the Dingo Hole Silica Project
The Dingo Hole High-Pure Quartz (HPQ) Project
Figure 1: Dingo Hole High Pure Quartz (HPQ) Project Location
The Dingo Hole HPQ Project is located within the Georgina Basin, approximately 300 kilometres southeast of Tennant Creek. It covers an area of 35.16 square kilometres.
From 2012 to 2016, Verdant Minerals Limited (legacy known as Rum Jungle Resources Limited) conducted limited project exploration. Key findings of the projects, as per the mapping and rock chip sampling program conducted by Rum Jungle Resources Limited in 2015, are mentioned below:
- Specialist laboratories in New York and Sweden revealed that all Dingo Hole samples tested via GDMS contained over 94% SiO2, requiring minimal sample preparation before the assay
- Pre-leaching 20% hydrofluoric acid at 60°C for 4 hours, followed by washing in Milli-Q water, was involved in the process of sample preparation
- The presence of low levels of harmful elements such as aluminium, titanium, and lithium contaminants is particularly noteworthy
- Nine out of 30 ICP-SMS samples from Rum Jungle’s program contained less than the IOTA® standard for deleterious element aluminium (Al) at 2 ppm (16,200 ppb)
- Nearly all samples surpassed the 200 ppb (0.2 ppm) IOTA® level for lithium (Li), and all were well below the 2 ppm (1,200 ppb) level for titanium (Ti)
These findings underscore the project’s potential as world-class, given its exceptionally low levels of harmful elements. Interestingly, the rock chip samples have significantly low amounts of aluminium, titanium, and lithium. This, in turn, can help a substantial portion of the Dingo Hole Silica adhere to the industry IOTA® standard for High-Purity Silica.
Why is Australasian Metals Limited interested in the Dingo Hole HPQ Project?
Australia is the second largest exporter of silica sand and quartz, exporting USD 248 million in 2022. Despite large export volumes, the country has untapped potential in high-purity quartz (HPQ) due to infrastructure limitations, regulatory hurdles, and market fluctuations. Australia’s HPQ projects promise significant potential, but strategic investments, innovation, and industry collaboration are needed. Australasian Metals Limited’s acquisition of the Dingo Hole HPQ Project, highlighted by Managing Director Dr. Qingtao Zeng, stands out for its technical feasibility and potential.
“The Dingo Hole quartz samples have unique geological characteristics with extremely low Al, Ti and Li impurities. We believe there are sufficient indications that the material in Dingo Hole has the potential to produce high pure Silica (HPQ). We are excited to test and further define the potential of this project.”
About High Purity Quartz and Its Global Demand
High-purity Quartz (HPQ) contains silica with less than 50 ppm contamination (99.995% SiO2). Despite modern processing reducing contaminants, substitutional elements limit ultimate purity and value. Ultra-high-purity silica, benchmarked by IOTA® standards, contains less than 16.2 ppm aluminium and total impurities below 20 ppm (99.998% SiO2). Aluminium, crucial to silica’s structure, can’t be fully removed, determining its value. IOTA-8® standards also require titanium below 1.2 ppm and lithium below 200 ppb.
Global Demand of High Purity Quartz
We live in a time when 77% of companies worldwide are either utilising Artificial Intelligence (AI) or exploring AI to improve their business operations. This percentage amounts to over 250 million companies around the globe. Also, deep statistical analysis has shown that the AI market is poised for a significant CAGR of 28.46% from 2024 to 2030. Semiconductors, crucial for AI, enable rapid and precise data processing, supporting applications like predictive analytics and natural language processing. The growth of AI is set to boost semiconductor demand, thereby increasing the need for high-purity quartz.
The semiconductor is also an essential component of solar panels. The International Energy Agency reported that 50% more renewable energy capacity was added in 2023 than in 2022. Moreover, the next five years are anticipated to experience the fastest growth in renewable energy capacity. This trend also signals a significant surge in the demand for high-purity silica shortly.
Regarding the market for HPQ, Dr Qingtao Zeng, MD of Australasian Metals, has commented, “The High Pure Quartz market is highly sought-after worldwide given the significant demands for AI-related semiconductor applications and photovoltaic solar silica growth.”
About Australasian Metals Limited
Australasian Metals Limited is a Western Australian mineral exploration and development Company focused on exploring gold, lithium, and other precious metals. Under purchase agreements, it retains ownership of more than 274.3 square kilometres of tenements in Australia. The Company owns several projects: the May Queen Gold Project, the Mt Clermont Gold Project, the May Queen South Bauxite Project, the Mount Peake Lithium Project, and the Barrow Creek Lithium Project.
Figure 2: Map of Australasian Metals’ Projects Locations
May Queen Gold Project
The May Queen Gold Project in Queensland’s Brovinia goldfield includes an exploration permit for minerals EPM 19419 and adjacent EPM 27746. It’s about 225 km from Bundaberg and 375 km from Brisbane, covering freehold land with no Native Title claims. Accessible year-round via gravel tracks from the Mundubbera-Durong Road, it only faces occasional access issues during summer storms. Historically, Burmine initiated modern exploration with mapping and sampling, followed by Black Swan’s extensive work in 1987-1988. They conducted soil and rock chip sampling and drilled 15 RC holes, revealing high-grade gold, with one sample assaying at 149 grams per tonne Au.
Mt Clermont Gold Project
The Mt Clermont Gold Project, EPM 14116, is located in Central Queensland’s Drummond Basin, about 60 km from Emerald and 330 km from Rockhampton. Accessible year-round via gravel tracks from the Gregory Highway, it experiences occasional flooding in summer. Impact Minerals explored the site from 2016 to 2019, conducting mapping, grab sampling, RC drilling, and geophysical surveys along the 10 km Retro Fault System. Drilling revealed a gold-bearing quartz vein system, extending mineralisation to 1,200 m in strike length and 125 m depth. Future exploration targets include detailed structural interpretation and close-spaced drilling to identify high-grade ore shoots and understand mineralisation geometry.
Dr Qingtao Zeng, Managing Director of Australasian Metals Limited
Dr Qingtao Zeng, Managing Director of Australasian Metals Limited, holds a PhD in geology from the University of Western Australia. He has extensive experience in lithium exploration and corporate transactions and is a non-executive director of Metaltech Limited and Kodal Minerals plc. Dr Zeng is a member of AUSIMM and SEG (Society of Economic Geologists).
Figure 3: Dr Qingtao Zeng, Managing Director of Australasian Metals Limited
Investors Outlook
Australasian Metals Limited owns an attractive portfolio of assets, including high-purity quartz (HPQ), gold, lithium, etc. Dr. Qingtao Zeng is a geologist who heads the Company strategically. He understands the metals geology and their markets, focusing on strategically essential minerals like high-purity quartz (HPQ) and lithium to position the Company well. His portfolio expansion toward critical minerals demonstrates a visionary approach that tries to match global trends toward sustainable energy solutions and emission-free circular economies. Australasian Metals Limited exhibits a tight capital structure, with the top 20 shareholders owning an impressive ~59.36% of the Company’s shares on issue. This concentrated ownership aligns the significant shareholders’ interests closely with the Company’s long-term success and significantly influences strategic decisions. The reduced free float of shares can reduce volatility and speculative trading impacts. As of May 25th, 2024, Australasian Metals Limited’s share price was traded at AUD 0.076, and a 52-week range was AUD 0.060 to AUD 0.240. The Company’s market capitalisation was AUD 3.96 million, with 52.12 million shares on issue as of the same date.
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