Actual revenue! Suvo has been upgrading it's Pittong Kaolin mine and production facility. That upgrade now complete and working to optimisation. A question has been, can they get the throughput? Today announced $0.66M order from China.

• Commercial scale trials completed on initial product resulting in first binding purchase order
• Purchase order covers up to 800 tonnes (+/-10%) of hydrous kaolin to be supplied between March 2023 and December 2023 whilst the Company advances a multi-year contract
• Product earmarked for the premium paint sector and will attract a ~35% price premium compared to the weighted average selling price achieved in H2 CY2022

Disc: Held in SMSF

Into a Trading Halt today in advance of announcing a capital raise.

Earlier this week maiden resource estimate for Pittong was announced:

Pittong Maiden Mineral Resource Estimate:

• Mineral Resource estimate completed at Suvo’s Pittong mining operation and reported in accordance with the 2012 JORC guidelines
• 3.74Mt Indicated and 1.97Mt Inferred Mineral Resource of kaolinized granite
• Total Indicated and Inferred Mineral Resource of 5.69Mt of kaolinized granite, yielding 1.97Mt of <45μm bright white kaolin with ISO Brightness 80.51 and bleached ISO Brightness of 83.61
• The Pittong mine is 100% owned by Kaolin Australia Pty Ltd, a subsidiary of Suvo Strategic Minerals Limited located less than 2km from the Pittong processing facilities
• Pittong currently produces ~25ktpa of refined kaolin products annually
• Suvo’s Trawalla deposit holds a further total Indicated and Inferred Mineral Resource of 12.7Mt kaolinised granite, yielding 3.5Mt of <45μm bright white kaolin with ISO Brightness 80.8 and bleached
• ISO Brightness 83.7 (ASX announcement “Trawalla Maiden Mineral Resource Estimate” 22 September 2021)

SUV out of a trading halt this morning on announcement of a proposed acquisition of a tenement prospective for high grade silica sand. Highlights from the lengthy announcement below.

Proposed Acquisition White Hill High Grade Silica Sand

Project

• ? Proposed tenement purchase for 100% of exploration license application E70/4981, located in the Muchea region of Western Australia
• ? Highly prospective for high purity silica sand
• ? Located 50km North of Perth, comprising 16
• blocks and ~4,700 Hectares (47km2)
• ? White Hill provides Suvo the potential to explore for high quality silica sand, targeting different end user markets to the Company’s existing portfolio of assets
• ? E70/4981 shares the western boundary of VRX Silica’ (ASX: VRX) Muchea silica sand project
• ? Strategically located next to the Brand Highway, with existing rail cart logistics in place and direct access to Kwinana bulk terminal

Commenting on the proposed acquisition the White Hill, high grade silica sand project, Suvo’s Executive Chairman, Robert Martin said “to secure such a large tenement of land that is prospective for high quality silica sand for such a minimal upfront outlay is a significant outcome for our shareholders and strengthens our already impressive silica sand assets. Our neighbours to the East have reported significant high quality grades over large volumes and we believe that the dune system that is producing this continues through this tenement. We are excited to progress this project and to test its potential to provide material suitable to meet the stringent requirements for high end materials including inputs for specialty glass for solar panels and mobile phone, as well as high-capacity lithium-ion (Li-ion or LIB) rechargeable batteries.

Terms:

In consideration for the Tenement Application, subject to the satisfaction of the conditions precedent, the Company intends to issue or grant (as the case may be) the following consideration to the Vendor:

a) Completion consideration: 333,334 Unquoted Options to acquire one (1) fully paid share ordinary share in the capital of SUV (Shares) at the exercise price of $0.15 per Share on or before 3 years from the date of issue;

b) Royalty: 4% of the proceeds of gross sales from Product derived from the Tenement Application;

c) Deferred Consideration Shares: Subject to shareholder approval and the following development milestones having first been satisfied, issue to the Vendor up to $1,550,000 Shares (Deferred Consideration Shares), in the following tranches:

i) Grant of Mining License: Upon the grant of a mining license over any area the subject of the Exploration License. The number of Shares calculated by dividing $1,150,000 by the greater of:

• - the 5 Day VWAP; and
• - $0.15

ii)Grant of Mining Permit: Upon the grant of all necessary mining permits over any area the subject of the Tenement Application required to commence production on a tenement (including environmental permits, water licenses, project management plans and mine closure plans), the number of Shares calculated by dividing $400,000 by the greater of:

• - the 5 Day VWAP; and
• - $0.15
• The Deferred Consideration Shares must be issued within 5 years of the date of the relevant shareholder approval (if any), or the rights to the Deferred Consideration Shares will lapse.

SUV announced today the extension of a supply agreement with Norske Skog Boyer until December 2024 for at least 25500 tonnes of hydrous kaolin from their Victorian Pittong mine and plant which they had purchased from Imerys.

• Agreement reached to extend supply of hydrous kaolin products for a further 3 years
•  Agreement covers up to and above 25,500 tonnes of high-quality paper grade kaolin
• Product to be supplied from Suvo’s Victorian Pittong hydrous kaolin operations
• Pricing is commercial in confidence but is in line with global rates
• New agreement commences January 2022

Commenting on the contract extension, Suvo’s Executive Chairman, Robert Martin said “We welcome the contract extension with Norske Skog at Boyer which shows not only Suvo’s ability to supply large quantities of quality product but also our ability to compete in what is affectively a global marketplace”

Quarterly results highlights below.  After the horror show that was UTR, SUV is on a positive trajectory and definitely worth watching, beginning to deliver against commitments, solid resources with good potential.  Free cash flow right now.  With $5M funding, will almost certainly have to raise capital to develop their resources but SUV definitely worth watching.

• Cash at bank of A$5.37m at 30 September 2021

•  Suvo’s Pittong Operations generated EBITDA of $832k for the September quarter. Total cumulative EBITDA of $2.33m since acquisition exceeds purchase price of $1.88m

• Positive operating cashflows of $317k with receipts from customers totalling $4.07m for the quarter

• Production increased 10% for the quarter to 7,215t of refined kaolin products with sales of 6,955t

• First 500t Rezel order fulfilled. Order book remains solid well into 2022 with strong international and domestic sales

• HPA testing on White Cloud ore achieves 99.992% (4N) (ASX Announcement 26 August 2021)

• Test work on Trawalla refined clay shows significant concentration of halloysite up to 45.4% (ASX Announcement 28 September 2021)

• Trawalla Maiden Resource Estimate completed with a 9.9Mt Indicated and 2.8Mt Inferred Mineral Resource of kaolinised granite reported (ASX Announcement 22 September 2021)

• Maiden Mineral Resource estimate for Pittong is imminent

• Subsequent to the Quarter end: Nova Maiden Resource Estimate completed with a 216Mt Inferred Mineral Resource comprising silica glass sand (132 Mt), silica flour (60Mt) and coarse silica sand (24Mt) reported (ASX Announcement 12 October 2021)

Another mineral resource release from SUVO today - the maiden JORC compliant estimate on their Nova silica sand project - looks like they're sitting on a great silica resource here.  More positive news - for those that have ridden this train (SUV is a reconstitution of a failed battery innovation effort that was UTR), things continue to look pretty positive.  Disc:  held in my SMSF

Maiden Nova Mineral Resource Estimate

• Inferred Mineral Resource estimate completed at Suvo’s Nova silica sand project and reported in accordance with the 2012 JORC Code guidelines

• 216Mt Inferred Mineral Resource comprising silica glass sand, silica flour and coarse silica sand

• Silica glass sand of 132Mt @ 99.24% SiO2, low deleterious elements including Fe2O3 of 0.05%, TiO2 of 0.04% and Al2O3 of 0.36%

• 60Mt of silica flour and 24Mt of coarse silica sand suitable for foundry applications

• 2020-21 drill program tested approximately 15% of total tenure, most holes drilled to approximately 20m ended in white silica sands

• Nova is unique in its product size range allowing the development of various products for a wide range of both domestic and international markets

• Nova project is 100% owned by Suvo and is afforded excellent infrastructure with the Dampier-Bunbury gas pipeline within the tenements and the Eneabba to Geraldton Port rail line only 1.2km to the West

• Further drilling is planned to extend and increase the resource, bulk samples to be used in metallurgical test work and final product generation

• Scoping study works have been commissioned with Primero

Australian kaolin producer and silica sand exploration company, Suvo Strategic Minerals Limited (‘Suvo or the Company’), is pleased to announce its maiden Mineral Resource estimate at their 100% owned Nova Silica sand project. Test work has shown that the various sands can be suitable for use in glass manufacturing, foundry applications and as a filler or for wellhead cement additives.

Suvo Executive Chairman Robert Martin commented “The outstanding results from our maiden JORC Resource at Nova has demonstrated that the extra time appropriated to undertake more detailed testing by Suvo was worth the wait. Achieving a 216Mt resource with low deleterious elements from approximately 15% of our granted tenure is truly amazing. Suvo now has one of the best if not the best silica resources in the Midwest. I would like to thank shareholders for their patience and congratulate the staff and consultants for their diligence in working towards these results. Nova’s numbers allude to the true potential of this deposit and we as a team are focussed on unlocking that considerable value. Nova’s maiden Inferred Mineral Resource is the first step towards commercialising what we believe will be a world class asset. The board and management team look forward to updating the market as further developments occur.”

Detailed resouce estimate annnouncement this morning from SUVO re the Trawalla site, summary only below.  More positive news from Suvo on aize and quality of their resource holdings.

Trawalla Maiden Mineral Resource Estimate

• Mineral Resources estimate completed at Suvo’s Trawalla project and reported in accordance with the 2012 JORC Code guidelines

• 9.9Mt Indicated and 2.8Mt Inferred Mineral Resource of kaolinised granite

• Total Indicated and Inferred Mineral Resource of 12.7Mt kaolinised granite, yielding 3.5Mt of <45?m bright white kaolin with ISO Brightness 80.8 and bleached ISO Brightness 83.7

• The maiden Mineral Resource estimate reported in accordance with JORC has resulted in an increase of approximately 20% to 3.5Mt of kaolin product, compared with the previous historical estimate

• Trawalla is 100% owned by Suvo Minerals Australia and located only 23km from the Pittong processing facilities, has an approved work plan, land access agreement and is mining ready

• Test work on Trawalla refined clay from a recent aircore hole showed significant concentrations of halloysite up to ~39% with ~84 ISO Brightness

• Trawalla halloysite-kaolin offers Suvo the opportunity to address new, traditional and evolving markets, such as battery and nano technologies subject to test work with Suvo’s partners, BGRIMM, LIXIL and Rezel

• A maiden Mineral Resource estimate is expected for Pittong in the coming weeks, to be reported in accordance with the JORC Code guidelines

•  

Australian kaolin producer and silica sand exploration company, Suvo Strategic Minerals Limited (‘Suvo or the Company’), is pleased to announce that the conversion of the Trawalla deposit historical Resources from Pan European Reporting Code 2001 (PERC) to JORC 2012 compliance has now been completed. This conversion has resulted in an increase of around 20% of kaolin product to 3.5Mt.

Commenting on the results, Suvo’s Executive Chairman, Robert Martin said “The conversion of the Trawalla Mineral Resource Estimate to JORC compliance is an important milestone in the development of a larger multi-decade operation at Pittong. The occurrence of halloysite is truly encouraging as it opens large traditional markets not currently addressed by Pittong, allowing immediate entry to newly emerging sectors for halloysite-kaolin including battery and nano technologies. Work is ongoing to define its extent, as is associated test work with our global industry partners. The Trawalla resource is essentially a shovel ready project that offers Suvo some very exciting opportunities ”.

More positive news from Suvo the last couple of days. 

Firstly a Pittong Operational Update:

Pittong Operational Update

• First payment from Rezel of $475,000 received prior to first shipment of 500t being dispatched

• MOU and Collaboration agreement with Rezel Catalysts Corporation for up to 10,000t per annum of refined kaolin products is progressing accordingly

• New Japanese client obtained for the Company’s high grade high value pharmaceutical grade kaolin

• Discussions ongoing with potential new major international clients

• Order book remains solid well into 2022 with strong international and domestic sales

• Primero engaged as project manager to fast-track planned Pittong plant upgrades to help meet increased demand

• Planning permits approved by Golden State Shire for construction of a new press deck building at the Pittong plant

• JORC resource results imminent on Pittong and Trawalla deposits

And secondly high concentrations of halloysite at Trawalla:

Up to 38.9% Halloysite in Trawalla Refined Clay Sample

• Suvo test work on Trawalla refined clay shows significant concentrations of halloysite to 38.9%

• Results confirm ultra-bright white (>84 ISO Brightness) of 86.7 and 91.3 after bleaching

• Trawalla’s halloysite-kaolin hybrid offers Suvo the opportunity to produce high-quality kaolin products with high modulus of rupture and good casting properties, providing end-users with better yield and higher efficiency.

• Halloysite applications are both existing (ceramics, pharmaceuticals & cosmetics) and rapidly evolving (battery technologies and nano technologies)

• Trawalla’s halloysite-kaolin also offers Suvo the opportunity to be the first halloysite-kaolin producer in Australia and the ability to enter new markets covering both kaolinite and halloysite products immediately

• Test work and product commercialisation is now being planned with independent world-class testing labs, technical partners and downstream end-users, which include, BGRIMM, LIXIL and Rezel, Suvo’s technical research and MOU partners as well as our existing customer base

• In-house research and development on high-grade pharmaceutical refined kaolin based on the Trawalla halloysite- kaolin and Pittong’s processing methods will enrich Suvo’s existing product portfolio with new products with high value applications.

• Trawalla is 100% owned by Suvo Minerals Australia with a granted Mining License (ML5365) comprising of 236 hectares and is only 23km from Suvo’s operating Pittong hydrous kaolin processing facility, the only hydrous kaolin plant in Australia

• JORC resources for Trawalla and Pittong sites are imminent

Commenting on the results, Suvo’s Executive Chairman, Robert Martin said “The number of true halloysite-kaolin deposits are rare, those that are within granted mining tenure and close to a hydrous processing facility and yet to be developed, are at the moment non-existent, in this regard Trawalla stands alone. Trawalla offers Suvo the opportunity to be the first halloysite-kaolin producer in Australia utilising its currently operating production facility at Pittong. Suvo plans to use its current market position to not only complete test work with global leaders in the industry, but to also define additional market segments that can be addressed immediately with Trawalla clay.”

Disc:  I hold a reasonable number of SUV in my SMSF as a result of a poor speculative buy into UTR which is turning out to be rather more positive.  I'm with @PaullyD that SUV may well be readying for a significant re-rate in value

Well I've made it into the black on my original UTR investments and showing now a reasonable return.  I've been impressed with SUV's ability to execute on what it says.  Another MOU/sales agreement announced today.

Costs seem well managed, sales pipeline solid.  The investment development decision on White Cloud and capital requirements will be important.

Some quick scribbling around I can see a path to 0.25 - 0.28c very achieveable.  I'm holding in my SMSF will add some to my portfolio here if we get a dip in price.