Altech Chemicals Breakaway Research Report 2014

Altech Chemicals Limited is aiming to become one of the world’s leading suppliers of a high-value product, 99.99% (4N) high purity alumina (HPA) (Al2O3). HPA is the major source material for scratch-resistant artificial sapphire glass, which is used in the next generation of smartphones as well as a growing range of high performance electronic applications such as LED’s, semi-conductors, and phosphor TV screens. The global HPA market is approximately 19,040tpa and is expected to double over the coming decade.

Current HPA producers use an expensive and highly processed feedstock material such as aluminum metal to produce HPA. Altech has reported the ability to produce 4N HPA directly from an ore feedstock, such as aluminous clay. Altech employs a proven processing technology to extract HPA from its low-cost and low-impurity aluminous clay feedstock in Western Australia. The Company is now advancing a Bankable Feasibility Study (BFS) to develop a full-scale 3,000tpa production facility.

Key Points:

• Ideally positioned to enter the rapidly expanding high purity alumina (“HPA”) market which is expected to grow at ~27% CAGR over the next 4 years to around 48,000tpa
• Low cost acid leach process developed from well understood technology to treat high purity aluminous clay feedstock
• Operating costs potentially up to 40% lower than current average industry cost, placing Altech as a first quartile producer
• Feedstock source at Meckering in WA owned 100% by Altech
• Proposed plant operations in southern Malaysia – low operating and capital cost environment
• Board and Management with broad technical and financial experience in the alumina and chemicals industries, and significant holdings in the Company
• Current 1 for 4 rights issue at 10c – closes December 15, 2014
• Base case post rights issue valuation range of $0.13 to $0.36/share, this is a risked valuation to reflect project stage

To read the full research report please download the document below.