ASX: HVY - Heavy Minerals
- Matt Birney
- 18 hours ago
- 4 min read
Heavy Minerals Ltd: Who would have thought – multi millions from garnet
Heavy Minerals Executive Chairman Adam Schofield on 2GB, 3AW & 6PR Bulls N' Bears Report
ASX-listed Heavy Minerals Ltd Executive Chairman Adam Schofield talks to Matt Birney on Bulls N’ Bears about his feasibility study showing millions in profits over decades from industrial minerals in WA.
TO LISTEN TO THE HEAVY MINERALS AUDIO INTERVIEW - CLICK BELOW
Heavy Minerals has spent years proving up its Port Gregory garnet project about 105 kilometres north of Geraldton. That process came to a crescendo in the last week when the company tabled a 700-page pre-feasibility study on the project, complete with a maiden reserve and some serious economics.
RADIO INTERVIEW - TRANSCRIPT
Matt Birney - Welcome to Bulls N' Bears, brought to you today by West Australian garnet developer, Heavy Minerals.
Matt Birney - ASX code: HVY.
Matt Birney - I'm Matt Birney and I'm joined now by the Executive Chairman of Heavy Minerals, Adam Scofield.
Matt Birney - Hi Adam.
Adam Scofield - Hi Matt.
Matt Birney - Okay, so Heavy Minerals has spent years proving up its Port Gregory Garnet project, about 100 case north of Geraldton in WA. That process came to a crescendo in the last week when the company tabled a 700-page pre-feasibility study on the project, complete with a maiden reserve and some serious economics, I might say.
Matt Birney - Okay, Adam, so you've just dropped the pre-feasibility study, long awaited, I might say, on garnet at your Port Gregory project in WA.
Matt Birney - We'll get to those numbers in a second, but firstly just tell me, what is garnet and what's it used for?
Adam Scofield - Matt, so garnet is an industrial abrasive. It's primarily used as a sand blasting product, and it's also used as a water jet cutting product.
Matt Birney - All right, well, let's do the fun stuff. Let's get into some rapid-fire questions and answers on this pre-feasibility study. Firstly, how much money is this project expected to make a year on average? Let's go with EBITDA.
Adam Scofield - 56 million.
Matt Birney - Okay, 56 million a year, and for how many years? What's the expected mine life?
Adam Scofield - 24 years.
Matt Birney - What will it cost to build the project? How will you fund it? And how many shares do you have on issue?
Adam Scofield - It'll cost us 122 to build. Of that, 89 is peak capital, and we have just over 70 million shares on issue.
Matt Birney - So you're saying that of the 122 million, part of it will be funded by profits from the project, and you only need to find 89 million. Am I reading that right?
Adam Scofield - Correct.
Matt Birney - Okay. What's the expected internal rate of return?
Adam Scofield - 47%.
Matt Birney - Okay, so this is a 24-year project. What's the post-tax net present value of all the profits discounted back into today's dollars?
Adam Scofield - Just short of 323 million.
Matt Birney - Tell me, who buys garnet? How big's the market, and what's the global supply outlook for them?
Adam Scofield - Largest consumer of garnet globally is the US military at around 25% of global demand. Saudi Aramco being the next. Uh, global demand is 1.8 million tonnes and currently supply is around 1.3.
Matt Birney - All right, so a deficit. Let's talk geology. How easy are these things to mine? Do you have to drill them and blast them like a normal hard rock project? Is there anything unique about your style of geology or is it pretty much straightforward?
Adam Scofield - There's no drilling blast. It's free dig sands, and, nothing particularly unique about our project.
Matt Birney - Now you've also got a second garnet project, I understand. When are you looking to get that into production and how will that contribute in terms of profits?
Adam Scofield - So that project is in South Australia. It's called Kanmantoo. We're expecting to have it in production end of first quarter next year, and that only requires 60 million worth of capital.
Matt Birney - And you'll use some of that money to fund this one, is that the idea?
Adam Scofield - Absolutely, and the balance sheet is a very strong lever on that respect.
Matt Birney - Hmm, okay. Well, Adam Scofield from Heavy Minerals.
Matt Birney - Thanks for joining me on Bulls N' Bears and remember, we're only here to give you information, not advice, which you should, of course, seek independently.
Matt Birney - I'm Matt Birney, and this is Bulls N' Bears.
Outro - For more public company CEO interviews, go to the money page on the 6PR, 2GB, 4BC and 3AW websites and click the public companies tab.
