Why Collins St CIO says this mineral sands biz ticks all the right boxes

With soaring energy costs hitting ours and many other nations, talks around the use of nuclear energy are picking up steam. A little-known Aussie explorer could stand to gain big from zirconium’s essential role in nuclear engineering.

Astron Corp (ASX: ATR) has over 35 years of experience in mineral sands processing technology and the marketing and sales of zircon products, and potentially possesses ‘one of the world’s largest zirconium/rare earth projects’…

…so believes Collins St Asset Management co-founder and CIO Vasilios Piperoglou.

“It has a potential 50-year mine life, you could argue, with a tier 1 asset in a tier 1 jurisdiction being Minyip, Victoria,” Mr Piperoglou said on Reach Markets’ The Insider: Meet the Fund Manager, referring to Astron’s Donald Rare Earth and Mineral Sands Project. Watch the full session.

“They have all their approvals in place, except for the mine site approval, which we believe will come early next year.”

Collins St Asset Management has lent Astron $5 million via a two-year convertible note based on its belief, among other factors, that the potential net present value (NPV) of the company could be in the hundreds of millions – potentially billions.

“From the downside perspective, we have first ranking security on the company’s Australian assets,” Mr Piperoglou said. “We got the land valued by an independent valuer and the valuation came, as in just farmland, to a conservative $10 million.”

The CIO also accounted for Astron’s rarity in not being picked up by the radar of brokers despite its up-and-coming potential.

“With these types of companies, it’s very hard to put a valuation. We haven’t precisely done a specific NPV ourselves – the reason being we think it’s at multiples to where it currently is,” Mr Piperoglou said.

“So as the Donald Mineral Sands project progresses, as they release their DFS (definitive feasibility study) hopefully early in the new year, and potentially their offtake agreements, then we will refine our model.”

Recently, on the 1st December 2022, the company announced its latest mineral resource of 525 megatonnes (Mt) at 4% total heavy minerals (HM), which includes a measured resource of 394 Mt at 4.2% of HM reported above a 1% total HM cut-off grade.

The contained heavy minerals within the site increased by 25% to 21 Mt with contained zircon increasing by 5% to 3.4 Mt and the contained rare earth minerals increased by 60% to 511.4 Mt reflecting an 18% increase in the monazite resource and the addition of a 135.5 Mt xenotime resource.

Monazite holds the valuable light rare earth elements neodymium and praseodymium and xenotime contains the valuable heavy rare earth elements of dysprosium and terbium.

In addition to Australia, Astron conducts a mineral sands trading operation and a zircon and titanium chemicals and metals research and facility, both based in China, and also owns the Niafarang Mineral Sands Project in Senegal.

Click here to view more videos from Vasilios Piperoglou’s Meet the Fund Manager session.

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