Scanning electron microscope image of halloysite-kaolin from Andromeda Metals Ltd.'s Carey's Well resource in South Australia, magnified down to 100 nanometers. Source: Andromeda Metals

Andromeda Metals Ltd. formed a new research company with fellow South Australian explorer Minotaur Exploration Ltd. that could help open up new markets in carbon capture, water treatment and medicinal carrier technologies for halloysite, a commodity now used mainly in ceramics.

On March 24, Minotaur announced the formation of 50/50 jointly owned entity Natural Nanotech Pty. Ltd., created to commercialize carbon capture and water purification applications from the halloysite recently discovered at Andromeda's Condooringie prospect in South Australia.

Analysis of historical drill holes earlier this month identified a new broad zone of high-grade halloysite at Condooringie, a few kilometers from the main resource at Andromeda's Carey's Well deposit, whose product is being targeted for ceramics, the conventional market for kaolinite and halloysite.

Andromeda Managing Director James Marsh told S&P Global Market Intelligence that recently completed drilling at Condooringie indicated it will likely be a bigger and higher-percentage halloysite resource than Carey's Well. Results are due within two months for confirmation.

A submission has also been made for a three-year, A$3 million federal government grant, which Natural Nanotech can match with the contributions of a major coal mining company interested in the carbon capture applications and a water treatment company that will be named if the bid is successful.

An updated scoping study on the Carey's Well deposit, part of the broader Poochera project, is due by the end of March, and the results of diamond drilling completed this month will be incorporated into a pre-feasibility study due by May. A definitive feasibility study should be completed by the end of 2020, with production targeted for mid-2021.

The University of Newcastle's Global Innovation Centre for Advanced Nanomaterials in New South Wales, Australia, has been doing lab-scale research for two years on Carey's Well's halloysite on carbon capture and water treatment applications.

Minotaur nonexecutive director Tony Belperio, joint head of Natural Nanotech with Marsh, said in an interview that bench-scale test work suggests natural nanotubes are six times better than the carbon nanotubes now used for stripping pollutants from water and for absorbing carbon dioxide.

The tiny, sub-micron-sized nanotubes have an extremely high surface area per weight ratio, with an "enormous absorbing capacity for the elements you're trying to strip out," Belperio said.

The high price of carbon nanotubes, which cost thousands of dollars per gram to artificially make, has held back research into new technologies such as water purification, energy storage, hydrogen storage, carbon capture and slow-release medical/pesticide carriers, Belperio said.

While the research was initially focused on carbon capture and water treatment applications, Belperio said the crippled markets caused by the COVID-19 pandemic prompted him to ask the university to also look at the viral medicinal carrying capacity of the natural nanotubes.

Strength of Andromeda's halloysite in South Australia

Belperio said researchers were excited by the prospect of what they could do with millions of tonnes of nanotubes available from the halloysite in the ground in South Australia, particularly given it is of superior quality to artificial carbon nanotubes, and Marsh said Andromeda has "all the significant known halloysite tied up."

Though there are other juniors in South Australia that claim to have halloysite and others with North American projects that have struggled, Marsh said retired Geological Survey of South Australia chief geologist John Keeling, who has published much work on halloysite, verified Andromeda has the "only genuine halloysite that he's aware of in South Australia."

Marsh also draws confidence from consulting former colleague Ian Wilson — who has been working with industrial minerals for 44 years, particularly in kaolin and halloysite, and who produced the chart above — who confirmed the strength of Andromeda's acreage.

While the COVID-19 outbreak in China initially prompted Andromeda to seek product sales within Europe, the Middle East and other parts of Asia, Marsh said reports suggesting China is recovering "surprisingly well" bode well for Poochera, so he still expects first shipments from Carey's Well by late 2021.

Marsh said South Australia's government also likes Carey's Well because it is not so much a mining operation, but more of a dry sand clay mining-quarrying operation, at low depth, with no tailings dam and low environmental impact, so permitting should be "straightforward."

In-demand critical battery material high-purity alumina can also be produced at a "four-nines" purity level from Poochera material with only a single-stage process.

Though Andromeda's stock price has crashed with many others since the onset of COVID-19, it had hit an all-time high in September 2019 leading up to the better-than-expected scoping study, and Marsh said the company will not need to raise any more cash before Carey's Well enters production in 2021.