Suvo Strategic Minerals Ltd (ASX:SUV) generated revenue of approximately A$12.3 million during FY24, around 8.85% more than in the previous financial year and expects this to grow as hydrous kaolin products from the company’s Pittong operations in Victora gain global traction.
Sales of hydrous kaolin products to the local and international market totalled ~20,000 tonnes during the 2024 financial year.
Optimising costs
The company also expects that a number of initiatives to optimise operational costs at Pittong will bear fruit and reduce capital outflows.
These include a reduction of operational working hours and staffing levels which still allow the company to meet current sales and production requirements.
Another plus for the future balance sheet has been the completion of a period of significant capital expenditure at Pittong.
Suited to high-margin industries
During the past 12 months, the company has undertaken extensive engagements in Australia and Asia with major industry players and market participants which identified that kaolin and applicable chemistry from Pittong is best suited to the high-margin industries such paints and coatings, rubber, inks and pharmaceuticals.
This has prompted kaolin sales efforts and focus on purchasers operating in these industries, which Suvo believes will deliver improved long-term results.
In the June quarter, Suvo achieved an average selling price on new customers converted after successful plant trials of A$863/tonne, which is a 47% premium compared to the weighted average selling price for other existing customers in the same period.
Increasing orders
Purchase orders were secured from existing Chinese distributor Qingdao Minglang New Material Co., Ltd totalling 1,568 tonnes of hydrous kaolin to be supplied between July 2024 and December 2025 valued at ~A$1.15 million and based on an exchange rate of 0.65:1 AUD:USD. These attracted a 22% price premium compared to the prior quarter sales to existing customers.
Qingdao purchased 596 tonnes of hydrous kaolin across the prior 18 months up to June 30, 2024, resulting in increased orders of almost 1,000 tonnes of hydrous kaolin.
The company continues product testing and trials with other potential end users operating in the end user markets or high-margin industries where the Pittong kaolin is being marketed due to its suitability.
Geopolymer concrete
Suvo has taken further steps along its growth path since the end of the June quarter with a tripartite binding Joint Development Agreement (JDA) executed between the company, its wholly-owned subsidiary Climate Tech Cement Pty Ltd (CTC) and Polevine Pty Ltd (PERMAcast).
READ: Suvo Strategic Minerals JV with PERMAcast a “watershed moment”
CTC and PERMAcast propose to deliver low-carbon geopolymer concrete (GPC) products and projects to market and otherwise commercialise the intellectual property (IP) created under the JDA through a joint venture entity.
The first GPC product to be delivered under the JDA, using Suvo’s Colliecrete formulation, will be a series of 1,000mm x 350mm x 350mm backing blocks which we be used for demonstration purposes on a major government infrastructure project.
Terms of the JDA stipulate that PERMAcast will provide the capital required to fund the project and any intellectual property created during the course of the JDA will be owned by the JV entity, acknowledging the background IP rights of Murdoch University licensed to Suvo.
CTC and PERMAcast will use their best endeavours to incorporate the JV entity and complete a shareholder’s agreement by the end of August 2024 with this process well advanced.