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“ When you look at the total global

Offtake of 551,000t – representing 83% of market, revenue is going to grow at
targeted production of 664,000t for the
first three years – has been secured under 3.5% [CAGR] over the next 10 years.
various contracts
Andromeda Metals Ltd and Sibelco market, revenue is going to grow at 3.5%
busy in Australia was helping to cast [CAGR] over the next 10 years. That con-
light on the sector. tinues the theme of not having meteoric
However, engaging Cannacord rises followed by crashes; it is just very
Genuity (Australia) Ltd as lead man- dependable growth,” Sorensen said.
ager to the IPO (JP Equity Partners “Growth is driven by fundamentals in
acted as co-manager) proved ben- the market – and in markets such as ce-
eficial for WAK. ramics and fibre glass – these are tradi-
“Cannacord knew that we were tional things that are linked to GDP and
not a gold play or something that in- improved living standards. Solid growth
vestors understood and also knew over time is what the traditional kaolin
that we were not an explorer, but a market is all about.”
producing company with production Underpinning the belief in the kaolin
assets and expansion ambitions in sector are the major shareholders who
mind,” Sorensen said. founded the company agreeing to long-
“That is unusual compared with term escrow period of five years and “of-
most of the IPOs that come to mar- fering dividends very early in the piece”
ket as explorers and at a different to investors.
phase of company development. Such moves were made confidently as
We have focused on the kaolin mar- WAK locked in offtake agreements, LOIs
ket, which is a stable kind of mar- and binding contracts for 83% of the tar-
ket and not subject to boom-bust geted 664,000t kaolin produced in the
cycles.” first three years of Stage 1 commercial
According to Grand View Re- production.
search commissioned by WAK, tra- One of WAK’s key customers sub-
ditional markets connected to kaolin scribed to take 338,000t kaolin over six
usage are expected to incremental- years last May.
ly grow over the next decade. Customers in Australia, Japan, Viet-
For instance, the paper market is nam and China are among the list of
expected to grow at a rate of 2.8% offtakers and interested parties to have
over the next 10 years, while ceram- signed LOIs and contracts to secure sup-
ics (4.9%) and fibre glass (3.3%) are ply from WAK.
destined to perform strongly. Expanding its customer base through
“When you look at the total global greater marketing efforts at a time of

Wickepin currently hosts a reserve of 30.5mt
kaolinised granite. Meanwhile, WAK has a
further 644.5mt in resource

aUSTRaLIa’S PaYDIRT FeBRUaRY 2021 Page 33