Allup Silica makes fresh start with new management, new project and new focus

Allup Silica Limited (ASX: APS; FRA: U77) has certainly not given investors much to smile about since its IPO around two years ago. At the IPO, the company raised AUD 5 million at AUD 0.20. According to the latest quarterly report as of September 30, 2024, around AUD 550,000 of this remains. For a long time, the company appeared directionless and acquired a variety of silica sand projects, mostly in the early stages of development. Accordingly, the share price recently traded at AUD 0.04 on low turnover.

However, since the summer of this year, Allup has begun to reinvent itself with new management, a new project and a new focus. The fresh start will soon be documented by a name change: Allup Silica will become McLaren Minerals Limited. At the beginning of August, the company secured 100% of the McLaren Titanium Sand Project in WA at extremely attractive conditions, although this initially went largely unnoticed by the market. This project will be the company’s flagship in the future. Allup paid AUD 150,000 in cash. In addition, the sellers (Westover Holdings Pty Ltd and Wild Side (WA) Pty Ltd) will receive a 1.5% royalty and 2 million APS options.  Additionally 8.4m shares will be issued, subject to the prohect achieving specific targets during the Pre-Feasibility and Bankable Feasibilty Studies.

New management under MD Simon Finnis

At the same time as the acquisition of the new flagship project, a new management team has taken over the management of the company. The new MD, Simon Finnis, has a proven track record of developing mining projects in Australia and Africa. He is a mining expert with over 35 years of experience, 10 of which were spent in the mineral sands industry. He managed the Pooncarie mineral sands project from feasibility to production and was CEO of the US$650 million Grand Cote mineral sands project in Senegal. Simon also served as CEO of Metro Mining and oversaw the implementation of the Bauxite Hills project in Queensland. Simon has worked with Peter Secker for 30 years. Peter is a mining engineer with more than 40 years of experience. He has developed a total of five greenfield projects in Australia and around the world, including the construction, commissioning and operation of the TiWest Mineral Sands Project in Cooljarloo, WA. Peter has been CEO of publicly listed companies since 1990 and has raised more than $2 billion in debt and equity.

Pre-Feasibility Study for McLaren project announced for Q2 2025

The new management team is moving quickly and has already engaged engineering firm IHC Mining (IHC) to complete the McLaren Pre-Feasibility Study (PFS). This study is expected to be completed in Q2 2025. The McLaren project has a 2012 JORC Indicated and Inferred Resource of 280 Mt at 4.8% heavy mineral, close to surface. The project covers 333 km2 of tenements, 150 km east of Norseman in Western Australia. Previous metallurgical test-work conducted by IHC indicated good ilmenite recovery from a conventional mineral sand flow sheet, and the PFS is focused on the production of approximately 400,000 tpa of ilmenite products. McLaren infill drilling program expected to be completed in Q1 2025. Environmental Resources Management (ERM) has been engaged to design the infill drilling program and update the Mineral Resource Estimate (MRE) upon receipt of drill results.

Based on his many years of industry experience, Simon Finnis expects strong demand in the ilmenite market to continue due to supply deficits and mine closures in Kenya, South Africa and Mozambique. Prices for titanium dioxide are currently strong and the price of ilmenite is well above international silica and kaolin prices of more than US$300/t due to the increasing scarcity of titanium.

Rights issue to raise A$1.64 million

Allup Silica is conducting a rights issue that will run until November 20, 2024. In total, the company intends to raise A$1.64 million through this offering. Existing shareholders will be offered the opportunity to purchase shares at A$0.035 each, which corresponds to an enterprise valuation of approximately A$3.5 million. This gives in particular the subscribers of the IPO round the opportunity to reduce their costs. The expected shortfall in the placement is expected to be covered to a large extent by investors close to Simon Finnis and Peter Secker. For these investors, the rights offering instrument is an excellent opportunity to position themselves. We will continue to follow the development of the company closely.