The Andromeda Metals Ltd (ASX: ADN) share price is losing ground today despite a series of updates for its Great White Kaolin project.
The Andromeda share price is down 8% trading at 20.5 cents at the time of writing.
What did Andromeda announce?
Offtake agreements
Earlier this month, the Andromeda share price surged as much as 27% to 27.5 cents following a significant binding offtake agreement for the supply of kaolin product.
The offtake agreement secured a much higher price to what was used in the company's pre-feasibility study, of A$700/tonne for ceramic grade material.
Additionally, the offtake agreement introduces a second product stream of ultra-bright, high-purity kaolin product, known as "Great White PRM'. The company says this will provide the benefit of product diversification and assist in managing offtake market risk.
Today's announcement advises that Conrad Partners, a commodity marketing agency, has engaged with high end ceramic users in China to secure additional offtake agreements for Andromeda. Some potential customers have previously signed letters of intent for Great White products. Conrad aims to translate potential interest into binding offtake agreements.
Additionally, Andromeda is in advanced discussion with potential customers located in Europe, the Middle East and other parts of Asia for the Great White refined halloysite-kaolin product.
Definitive feasibility study update
Andromeda advises that its definitive feasibility study (DFS) is "well advanced" but has only focused on the production of Great White CRM for the ceramics market.
The recent binding offtake agreement for Great White PRM for the coatings and polymer market will need to be incorporated into the DFS.
Mining lease application
Andromeda previously lodged a mining please application with the South Australian Department for Energy and Mining (DEM) on 25 February 2021.
The company forecasts the receipt of the mining please approval by mid-2022 in line with DFS and bankable feasibility study (BFS) completion.
Other updates
Andromeda is testing the potential use of its halloysite-kaolin product as a rheology modifier product for the concrete industry. The company has successfully lodged a patent and is currently undertaking additional test work. It said the addition of halloysite-kaolin to concrete could potentially reduce concrete costs, lower carbon footprint and improve performance for concrete suppliers.
The potential concrete application is currently in a testing phase and product marketing has yet to be performed. The company advised that this is unlikely to be included in the DFS.
Andromeda entered into a memorandum of understanding with AEM to use its patented process to make high purity alumina (HPA) using kaolin back in May.
Today's announcement advised that HPA studies are progressing and samples have been provided to AEM for testing.
The Andromeda share price in 2021
Despite today's positive list of updates, the Andromeda share price has slipped 6.67% to 21 cents today.
It's possible today's sharp fall could be exacerbated by the 1.8% drop in the S&P/ASX 200 Index (ASX: XJO).
The Andromeda share price is down 32% this year, with a year-to-date low of 16 cents.
