{australien_flagge}Following the end of its collaboration with Alcoa, FYI Resources (ASX: FYI; FRA: SDL) has released details for the first time on the timing and size of its planned mini high-purity alumina (HPA) production plant. According to the release, the company plans to build a modular plant with an optimized capacity of 1,000 tons per year starting in May 2024. By the end of this year, engineers are expected to complete the detailed design and quantify the exact amount of investment and operational costs. At the same time, FYI aims to obtain the necessary permits and secure financing.
{australien_flagge}Following the end of its collaboration with Alcoa, FYI Resources (ASX: FYI; FRA: SDL) has released details for the first time on the timing and size of its planned mini high-purity alumina (HPA) production plant. According to the release, the company plans to build a modular plant with an optimized capacity of 1,000 tons per year starting in May 2024. By the end of this year, engineers are expected to complete the detailed design and quantify the exact amount of investment and operational costs. At the same time, FYI aims to obtain the necessary permits and secure financing.
The facility will allow FYI to deliver samples to more than 25 potential Tier 1 and Tier 2 customers, according to today’s announcement. Interested parties include 12 Tier 1 customers and 16 Tier 2 end users in the sapphire glass, e-mobility and niche product sectors in various countries including East Asia, Europe and North America, according to FYI.
As FYI points out, the company has sufficient funds for the project development phase and has submitted several grant applications at the federal and Western Australian state levels for selected phases of the project capital. HPA is increasingly becoming a sought-after feedstock for certain high-tech products due to its unique characteristics and physical and chemical properties, particularly in high-growth areas such as micro-LEDs, sapphire glass products, and battery separators.
Figure 1: The mini production plant with a capacity of 1,000 tons is scheduled to be built starting in May 2024.
With its modular design, the small-scale production (SSP) plant is expected to enable a smooth transition to commercial-scale production. The goal, he said, is to provide customers with a consistent HPA offering. The mini-factory will enable FYI to produce bulk samples for testing and qualification by potential customers, he said. The facility will enable process optimization for end-product development and also serve as a testing and training facility, he said.
Bottom line: it will likely be another full year before FYI can build its first mini-factory for kaolin-based HPA. Another eight months can then be estimated for the construction period. Accordingly, actual production could probably not begin until the end of 2024. For FYI shareholders, that feels like a long dry spell. On the other hand, 1,000 tons of HPA already represent a considerable sales volume. Assuming that the highest quality ton of HPA can be sold for at least $30,000, we are talking about $30 million in revenue per year. If we then assume the costs of USD 6,000 per ton of HPA estimated in the feasibility study, the bottom line would already be a fat profit plus in 2025. The business model is so simple (once the technology is in place): FYI delivers better quality HPA at a fraction of the cost and with a better carbon footprint. It should be possible to find an off-take partner for this. In the best case, this partner would also bring in money. These are exciting times for FYI.
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