Alpha released its 4C and corporate update today:

Highlights:

• As mentioned previously, the commissioning of the Stage 1 plant is complete and the focus has turned to tuning production capacity and quality, well underway
• This has triggered the first tranche of the government's Critical Mineral Development Program Grant and A4N has received $6.82 of the $15.5M Grant.
• Increased sales and marketing activity with multiple sample orders placed for potential production quality volumes. Nice to see a little more detail here than from previous announcements. Even more would be better!
• Continued investment in Stage 2 Design & Engineering and progressing to FID
• On the product development front, Successful development of Tri-Hydroxide (ATH). Following interactions with several significant lithium-ion cathode manufacturers and a global advanced materials company, Alpha’s product development team successfully developed a 4N+ Al(OH)3 (ATH) product with a sample product having now been shipped and under qualification testing. This product is a potential high-volume product across a diverse spectrum of applications, including lithium refining and as a dopant in cathode and speciality glass manufacture.
• Continuing collaboration and investment from Orica: In November Alpha signed a non-binding Memorandum of Understanding (MoU) with Orica to mutually investigate the technical and commercial feasibility of establishing a new manufacturing facility in North America to produce high-purity aluminium products for the rapidly expanding future-facing industries in the region. Concurrent with the establishment of its North American MoU, Alpha and Orica executed and completed a Subscription Agreement with Orica acquiring a 5% equity interest in the Company.
• Cash on hand $28M

Lowlights:

• Actual booked revenue from sales is insignificant. Given the talk up in the release of the scale of sample and product testing, the booked revenue is virtually non-existent. Now they are through commissioning the Stage 1 Plant, getting sales beyond a much talked about pipeline and into the bank.

I was away for quite a bit of time but easing back into the swing of things... for those who were following along previously, you'll remember Alpha HPA is a small 'start up' in QLD focussed on new processing technology to produce the highest purity alumina (HPA) which is used in... Li-I batteries, sapphire glass, LED lighting ... and has many potential decarbonisation applications.

You'll remember that over the last year there have been significant grants to support their stage one production facility being built near Gladstone... and today A4N announced the achievement of first production, The plant is producing approx 800kg a day of al-nitrate with further optimisation to come. So a significant step, not the endgame but a very significant milestone.

A4N remains a hold in my SMSF. I added more at $0.40 and feeling that it should have been more. Sales volume appears to be increasing. Awaiting the next quarterly update on sales which is really the big hurdle now to commercialisation. The tech seems to work.

12 month share price history:

Another significant grant awarded today to A4N - $15.5M. That's $60M in grants in the last 6 weeks which will be a significant accelerant to existing plans.

ALPHA AWARDED UP TO $15.5M FEDERAL GOVERNMENT GRANT

CRITICAL MINERALS ACCELERATOR INITIATIVE

The Board of Alpha HPA Limited (‘Alpha’ or ‘the Company’) is pleased to advise that it has received notification from the Commonwealth Department of Industry, Science, Energy and Resources (‘Department of Industry’) that its application for grant funding under the Critical Minerals Accelerator Initiative (‘CMAI’) has been approved for up to $15.5M.

The CMAI grant activities are separate and distinct from those under the successful approval of $45M under the Modern Manufacturing Initiative Collaboration Stream (MMI-C) as announced on 16 March 2022, where grant monies will be directed towards the capital requirements of the HPA First Project’s full-scale commercial facility.

The $15.5M CMAI grant funds will be applied toward immediately expanding and accelerating the production capability of the Precursor Production Facility (PPF), which is currently under construction in Gladstone as Stage 1 of the HPA First Project.

Specifically, this CMAI grant funding will be directed towards:

• Further expanding PPF production capacity of high purity aluminium precursors
• Facilitating up to 10tpa of additional capacity of High Purity Alumina (HPA) production
• Facilitating up to 10tpa of additional capacity of High Purity Boehmite production
• Facilitating the addition of tableting capacity to produce HPA tablets for sapphire glass growth
• Installation of a large rooftop solar array and battery storage capacity

The Company will seek to promptly finalise a grant agreement with the Department of Industry.

Alpha’s Managing Director Rimas Kairaitis commented:

“Alpha is delighted to receive further financial and commercial support for the HPA First Project from the Australian Federal Government. These additional funds will allow Alpha to accelerate its response to inbound demand for additional product volumes, in particular the production of HPA tablets to meet the immediate demand for sapphire glass production, and rapidly establish Alpha HPA in the supply chain at commercial volumes.”

General update from Alpha today. Previous straws outline the potential basis of interest (summarised again below). Today's update touched generally on the Stage1 and Stage 2 PPF project; sales and marketing and the divestment of their Wonogiri project.

Disc: Holding here and in my SMSF - an 'I'm interested, think there might be something here' holding while I learn more

STAGE 1 - PPF

Building construction advancing well; manufacturing equipment being delivered and contracts awarded for fit out. Still on track for end of year first production.

Existing Demonstration Plant which was damaged during Brisbane floods has been relocated and should be operating again in 2-3 weeks

Stage 2 Full Production Facility: Environmental Authority has been granted for the Stage 2 expansion

PRODUCT MARKETING

The first scale production order for the new plant has been received. The order is for an initial 1 metric tonne of Alpha’s ultra high purity boehmite from a global materials company and will be applied to commercial scale production trials. Revenue details of this sale not disclosed.

HPA Pellets for sapphire glass

Alpha is seeking to respond to a significant increase in inbound demand for HPA pellets for sapphire glass growth with the sapphire glass market having been heavily disrupted as a result of Russian-targeted sanctions. The sapphire glass market includes a wide range of applications including:

• Sapphire wafer substrates for LED lighting
• Sapphire wafers for premium watches and consumer electronics
• Sapphire windows for smartphone camera lenses and LIDAR

The Company’s HPA pellets are already qualified for sapphire glass through to a premium end-user.

Further product testwork and sample orders

Alpha has received further orders for both product samples and for the completion of in-house coating testwork using the Company’s Al-Nitrate pre-cursors. These include:

• Sintered HPA pellets for a South Korean based sapphire glass producer
• HPA powder for Li-B cathode coating
• High dispersible boehmites for speciality ceramics
• In-house testwork coating Li-B anode materials for a Japan based anode manufacturer

WONOGIRI PROJECT DIVESTMENT COMPLETE

Alpha advises that with the successful ASX IPO of Far East Gold (ASX: FEG), the Company has completed the divestment of its 45% interest in the Indonesian Wonogiri Project, which now forms part of FEG’s exploration portfolio. Alpha now holds 17.1M shares in FEG, or ~7.93% of its issued capital. These shares are in escrow until March 2024.

About the HPA First Project

The Company’s HPA First Project represents the commercialisation of the production of ~10,000tpa equivalent of high purity alumina (HPA) and related high purity precursor products using the Company’s proprietary licenced solvent extraction and HPA refining technology. The disruptive, low-carbon process technology provides for the extraction and purification of aluminium from an industrial feedstock to produce 4N (>99.99% purity) alumina and 5N (>99.999% purity) for sale into the lithium-ion battery and LED lighting industry.

Alpha completed a Definitive Feasibility Study in March 2020 following a successful pilot plant campaign in 2019. Alpha has since upscaled its Brisbane facility to demonstration scale and has now recorded over 7,000 operating hours and delivered an expanded range of over 80 high purity product orders to end-users globally.

Alpha is fully funded to the commercial production at its Stage 1, Precursor Production Facility which is scheduled to commence commercial production for the Company’s high purity Aluminium Precursors from September quarter 2022.

The Company is now in the mature phases of market outreach and project financing with respect to the full scale HPA First Project, with the expectation of positioning the HPA First Project to Final investment Decision.

Trading up almost 20% this morning on great news that Alpha will be receiving a $45M grant from the government. $45M makes a huge difference at this stage of their development!

The grant will be applied to the capital costs of the HPA First project described in previous straws. Orica who are partners in the project will receive about 10% of the money to offset their capital contributions.

Update from Alpha today. Not a lot of new news, much of it was at least alluded to in their results announcements. I suspect mostly trying to keep up the interest. Highlights:

Construction of the stage 1 plant is on schedule. Groundworks almost complete and construction materials arriving on site. Some changes have been made to Stage 1 to materially increase the throughput of the plant for stage 1 by up to 75% now expected to be around 350tpa. This comes with an increased capital cost of $7.9M.

Some positive nibbles on the sales side. A test of HPA pellets has been approved for the production of sapphire glass from a "premium end use customer". The customer has placed a secondary order and Alpha believes this to be a strong endorsement of quality and anticipates significant commercial orders next year.

Further orders for test materials have been received and two new commercial scale bids have been tendered

You may remember my previous straw on A4N. A dose of covid laid me low and I haven't had much chance to dig much further but quarterly activity reports and finances were released last week so here's another quick sketch of a small company that may well have a bright future.

The business has an aluminium purification technology that claims to produce the world's highest purity aluminium at low cost... High purity aluminium is critical for Li-ion batteries, synthetic sapphire (think the glass on your iPhone) and LED lights.

Currently burning cash at about $2.5M a month but $36M in the bank. Miniscule receipts from customers right now but those receipts are sampling orders to test product in commercial and research applications. Alpha have submitted 12 documented high volume bids for supply of larger volumes but all these are commercial in confidence and only described in generic terms at this stage. All except 1 of the 12 are to offshore organisations. Additionally, 19 end-user product tests are underway.

The company is focused on its HPA First project in Gladstone which is its pathway to commercialisation of the proprietary aluminium purification and refining technology. The stage 1 Precursor Production Facility is fully funded and expected to be operational in August this year. At the same time they are pursuing an FID process for a full-scale facility.

So early days and very speculative. I bought a position in both my SMSF and Strawman in mid 50c and it has appreciated well the last month. The original Bell Potter recommendation was a speculative $0.87. So lots of water to flow under this bridge but so far so good, the next year will tell us more. It's critical obviously that research and testing turns to orders.

My interest was piqued when I noticed A4N (https://alphahpa.com.au) in Bell Potter's Analysts Pick Summary for 2022. I was unfamiliar but from a quick investigation, I'll be spending some time digging into this company. That Bell Potter report has a Speculative buy recommendation with a target price of $0.87.

The business has an aluminium purification technology that claims to produce the world's highest purity aluminium at low cost... perhaps too good to be true? Perhaps deeply disruptive? Worth exploring. High purity aluminium is critical for Li-ion batteries, synthetic sapphire (think the glass on your iPhone) and LED lights.

The Bell Potter report quick overview:

"A4N’s HPA and aluminium precursor products have applications in lithium ion battery, micro-LED and semiconductor manufacturing – technologies at the forefront of the global decarbonising and onshoring themes. The company’s proprietary process has produced product samples which have been recognised by a number of end-users as the highest purity tested. The high purity products and competitive unit costs have the potential to disrupt incumbent production methods and establish A4N as an integral part of rapidly advancing technology supply chains. The company has line of sight to cash flows as operations commence from its Precursor Production Facility from August 2022."