Perth-based Altech Chemicals has sought $14.5 million from a rights issue to advance its high-purity alumina project in Malaysia.
Altech is seeking to develop HPA sourced from its wholly owned kaolin deposit in Meckering, in Western Australia’s Wheatbelt.
Product will be shipped to Altech’s proposed 4,500 tonnes per annum processing plant in Malaysia, currently under construction.
The project’s initial capital costs are expected to be $US298 million ($A409 million).
Proceeds from the two-for-one rights issue, priced at 4 cents, will go towards Altech’s green bond initiative – environmentally conscious financing for the HPA project – and payments for stage two early construction works.
The funds raised will also go towards development activities associated with an anode grade HPA product, Altech said.
Its major shareholders, including Deutsche Balaton and Melewar, have agreed to subscribe for about 52 per cent ($7.6 million) of the offer.
Altech is also offering one free attaching option, exercisable at 8 cents, with an expiry of May 2022.
Its HPA project holds a net present value of $US505 million ($A694 million) and is expected to generate earnings of $US76 million ($A104 million) each year, at an internal rate of return of 22 per cent.
Altech has already secured revenue from the project after signing a 10-year offtake agreement in 2016 with Mitsubishi, which has agreed to buy 32,000 tonnes of HPA in total.
The agreement will begin once Altech ships its first final HPA product.
The company is considering Saxony in Germany as the location for its second HPA plant.
Its shares were down 12 per cent at 12:52pm AEST to trade at 4.3 cents.
