Interview with Dr. Mike Jones, MD of Impact Minerals Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/impact-minerals-asxipt-pitch-perfect-3608

Recording date: 22nd November 2023

Impact Minerals Poised to Help Fill Booming HPA Market through Low-Cost Production
High-purity alumina (HPA) remains a niche commodity today, but surging lithium-ion battery and LED lighting demand is fuelling the rapid market growth. With existing HPA producers already struggling to supply global requirements, Impact Minerals could enter the scene at an ideal time to help fill the widening supply-demand gap.

Impact controls substantial mineral resources in Western Australia capable of low-cost HPA production through a straightforward leaching process. Recent scoping studies validate the project’s world-class economics. Targeting operating expenditures under $10/kg HPA would establish an impact among the industry’s lowest-cost producers. Below $15/kg is considered competitive. Coupled with factors like full permitting and modular scale to minimise initial capex needs, Impact is positioned to capitalise on the HPA market’s unprecedented expansion.

Strategic Priorities Aligning to Reach Commercialisation
Impact has systematically focused its latest work programs on optimising HPA production flowsheet design and costs. Successfully generating larger-scale HPA samples remains key to qualifying product specifications with potential customers next year. Concurrently, management aims to accelerate critical mining agreements, project feasibility studies, and engineering reviews required for commercialisation. These coherent strategic priorities over the next 18-24 months are targeted to de-risk the project’s commanding upside potential.

Attractive Valuation with Over 5X Upside to Peer
Despite outstanding economics and strategic momentum, Impact Minerals still trades 70% below its 2021 highs. But successfully executing its development milestones in the period ahead can re-rate the company substantially higher. The project’s current discounted valuation contrasts significantly with HPA developer peer Alpha HPA, for example, which reached over a $1 billion market cap and trades at 5 times Impact’s current price, despite holding less advanced projects.

Ultra-High Margins Beckon Amid Deepening HPA Shortage
Impact’s projected production costs potentially half that of existing HPA producers set the company up to achieve ultra-high profit margins from selling into supply-short markets. Customer demand is clearly demonstrated, with multiple lithium-ion gigafactory and LED manufacturing investments driving HPA requirements higher every year. In a commodity market with distinctive supply pressures, Impact’s production scalability and low-cost output advantages provide a prime opportunity to generate major shareholder value. The bull case appears intact for substantial upside revaluation potential as strategic priorities advance toward targeted production within the next 3 years.

View Impact Minerals' company profile: https://www.cruxinvestor.com/companies/impact-minerals

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