New critical minerals manufacturer aiming to list on the ASX

The ASX is set to welcome a new $300 million metals manufacturing company to the bourse in the coming weeks, with Advanced Energy Minerals Ltd (ASX: AEM) looking to raise up to $50 million in an initial public offer.

The company, in a prospectus lodged with the ASX, said it is a manufacturer of high purity alumina (HPA) at its production facility in Cap-Chat, Canada, where it recently finished a two-year capital works program.

Expansion funds sought

The existing facility has a 2000 tonne per year production capacity, with the company raising new funds to help expand production to 3000 tonnes per year. As Richard Seville, the company’s chair, explains, this would make it a major player in the HPA market.

At 3,000 tonnes per annum, AEM would be the third largest HPA producer in the world outside of China.

Mr Seville goes on to explain that demand for HPA is growing rapidly.

The HPA market has grown rapidly over recent years with a compound annual growth rate of approximately 13.6% over the period from 2013 to 2024, and with double-digit growth forecast to continue for the next ten years. This growth has been driven by mass adoption of LED technology for energy efficient lighting and supported by significant demand growth in semi-conductors, advanced ceramics and lithium-ion batteries. All of these sectors are forecast to see continued growth underpinned by increased demand for processing and data storage associated with artificial intelligence.

Mr Seville said independent research from CM Group has indicated that there would be potential undersupply of HPA next year, and also for the period from 2029 to 2034.

As a result, we consider this to be an excellent time to be entering the HPA market. In response to these market dynamics, CM Group have forecast prices to increase from the current US$25/kg range to US$40/kg in the longer term.

Not your everyday commodity

Mr Seville said HPA was unlike most other commodities in that it needed to be tailored to meet each customer’s needs in terms of purity, particle size, and morphology, with the time period for qualifying a product with a customer taking as long as two years.

AEM, he said, was well progressed in this area, putting it in a strong position.

AEM has been able to advance this qualification process with a range of customers as the Cap-Chat Plant has consistently produced HPA on specification for over three years. As a result, AEM currently has eleven projects which have completed the qualification process phase and are in the commercial relationship stage, with twenty-two Projects in the industrial trials phase, and eighty-six in laboratory trials.

The company is aiming to raise at least $40 million via the issue of new shares at 53 cents each, with oversubscriptions of $10 million allowed under the offer.

Advanced Energy Minerals expects to close off the initial public offer of shares on November 28, with trading on the ASX to start on December 12.

The company would be valued at $307.2 million on listing based on raising the minimum $40 million.  

The post New critical minerals manufacturer aiming to list on the ASX appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.