Following a period of robust growth in kaolin sales and a renewed focus on low-carbon geopolymer concrete, Suvo Strategic Minerals Ltd (ASX:SUV) has unveiled an updated strategic direction and revised production and earnings guidance for the 2024 financial year.
Engagement and analysis
The company’s revised strategy, set out in its March quarterly activities statement, reflects the significant customer engagement and analysis efforts Suvo has made to understand the markets for its products.
Purchase orders were received from five new customers operating in high-margin industries such as paints, coatings, rubber, inks and pharmaceuticals, achieving an average selling price of A$863 per tonne – a 47% premium over previous quarters.
Interim CEO Bojan Bogunovic has led extensive industry engagements in Australia and Asia, identifying the optimal markets for Suvo’s Pittong hydrous kaolin.
As a result of this market analysis, the company will shift focus from low-margin bulk volume industries to high-margin sectors.
Bogunovic said: “It has been a valuable process to go through over the past 12 months.
“We consider that Suvo now has an advanced understanding of the kaolin industry worldwide and most importantly we understand where our product fits and who to target for the sale of our product.”
Production at the Pittong plant will scale with value-accretive sales orders, accompanied by operational cost optimisation initiatives.
Geopolymer concrete
Suvo is progressing the commercialisation of its geopolymer concrete (GP), developed in collaboration with Murdoch University.
Laboratory trials have produced promising results, with the Pittong kaolin-based GP concrete achieving an average strength of 48 megapascals (MPa), surpassing many traditional concrete applications.
The GP technology aligns with Suvo’s kaolin assets, using kaolin from the Gabbin deposit in Western Australia.
The company envisions using Pittong kaolin as a potential feedstock for GP formulations in Victoria.
What's next?
Suvo’s Pittong plant, with a capacity of 50,000 tonnes per annum of hydrous kaolin, will adjust production based on demand.
The company’s revised FY24 production guidance reflects a strategic decision to focus on high-margin sales.
To streamline operations, Suvo will relinquish most of its silica sand tenements at the Eneabba Project in Western Australia, retaining only a portion of EL70/5001 on privately owned farmland.
This decision was made to reduce administrative overheads and facilitate obtaining native vegetation clearing permits, potentially lowering costs and project timelines.