Altura Mining (ASX:AJM) non-renounceable rights issue


by Rachael Jones

Altura Mining (ASX:AJM) Managing Director James Brown, talks about its rights issue to raise $21M, production at its Pilgangoora mine in the Pilbara and outlook for lithium demand.

Rachael Jones: Hello, I'm Rachael Jones for the Finance News Network. Joining me today in Melbourne is managing director of Altura Mining, James Brown. James, welcome to the Network.

James Brown: Thank you for the opportunity to tell the Altura story.

Rachael Jones: Now first up, James, could you start by giving us an introduction to Altura?

James Brown: We've entered into the production ranks of lithium concentrate producers into the expanding electric vehicle market. We've completed 12 months of full production through commissioning. We've had two consecutive quarters of commercial production. We had a production record in the previous quarter, around 45,000 tons of lithium concentrate, and we're seeing more importantly for us, our cost structure coming down to establish Altura as one of the longer term in excess of 24 years mine life, and lowest cost global producers of hard rock lithium concentrates.

Rachael Jones: And how many shipments have you made, James?

James Brown: Presently we have 15 shipments, around 114,000 tons to date and we're consistently shipping out of the port of Port Hedland.

Rachael Jones: And what makes Altura different?

James Brown: I think what makes us different is that I believe we have the correct product at the correct time. We've been able to make inroads into an established market with few suppliers. What differentiates our products is probably the lack of impurities. Obviously, we sell a very low mica product, which is obviously detrimental to lithium hydroxide and carbonate production, so what we're seeing is a very amenable product. It's very amenable to upgrading and integration into the system, so I think from our perspective, we're able to supply what people want and when people want it. 

Rachael Jones: Now let's talk about your financials, James. You recently a new shareholder, your largest shareholder, in fact. Can you tell us more about this?

James Brown: Recently, we welcomed Ningbo Shanshan as our largest shareholder in Altura at 19.4%. Shanshan is the largest global anode and cathode producer and certainly in the top four of electrolyte producers, so having them come on board with a fairly senior holding the register, they hold a board position, so obviously we've got intelligence and alignment with which was happening in the downstream battery industry is very reassuring to all shareholders in Altura.

Rachael Jones: And James, can you tell us about your rights issue to raise 21 million? What will these funds be used for?

James Brown: Rachael, the rights issue, it will underpin the further stabilization of the company as it approaches its name plate production, so we believe that's fairly imminent. Certainly, we forecast that before the end of the Australian financial year, but we think we're approaching that somewhat closer. It strengthens our balance sheet, allows us some flexibility in going forward and certainly in implementation of improvement processes so we can optimize our product stream, and we have a fairly extensive exploration portfolio. We've just taken on some more territory in the Pilbara, and we're certainly looking at increasing our presence and inventory levels around the mine site and the new areas that we've acquired.

Rachael Jones: And to the last question now, James, what is the outlook for 2020? What can shareholders expect?

James Brown: From a practical perspective and an operational perspective, we're always striving to achieve our name plate production levels, which is around 18,000 tons per month of lithium oxide concentrate. We're very close to those levels. We reported in September quarter that we produced around 45,000 tons and we believe we'll be able to advance on that in our forecasting for the next quarter.
 We're also looking at, importantly for us, is one of the areas that we can control and we should be in control of is their costs. We believe we will be able to significantly reduce our costs and heading towards sub US$300 operating cash cost. We reported US$365 average for the September quarter. Improvement processes are underway and we're certainly feeling that we're closer to achieving that mark during the near future.

Rachael Jones: James Brown, good luck for the raise and thanks so much for the update today.

James Brown: Thank you, Rachael. We much appreciate it having me on your show.


Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.