A Brisbane-based junior looking to become a significant player in the emerging decarbonisation sector has, during the past few months, completed a number of strategic moves to ensure its integrated flagship kaolin project in Queensland becomes a cash generator by mid-2026.
During the September quarter, Zeotech Ltd (ASX: ZEO) proved that its AusPozz™ value-adding processing technology, which will convert its Toondoon kaolin resources into direct shipping ore (DSO), is commercially viable when it comes to producing both high reactivity metakaolin for the low carbon concrete market, as well as advanced materials for greenhouse gas mitigation such as zeolites for fugitive methane control.
To achieve this, the company undertook a commercial concrete demonstration pour of around 100 cubic metres (or 17 truckloads) – an exercise that validated its function as a high-performance supplementary cementitious material (SCM) with the ability to significantly reduce the total binder and embodied carbon of cement.
Just weeks later, ZEO announced it had made a binding $200 million production agreement with China’s Jiangsu Mineral Sources International Trading Co Ltd (MSI), an international trading house and one of the world’s leading independent bulk raw material trading outfits.
Under the terms of this arrangement, MSI will have exclusive off-take and marketing rights for the Queensland company’s specified kaolin products in China (including Taiwan and Hong Kong), South Korea and Japan.
ZEO then signed a non-binding memorandum of understanding (MOU) with Laing O’Rourke Australia Construction Pty Ltd, a global engineering and manufacturing-led construction leader that delivers state-of-the-art infrastructure and building projects across Australia, the UK and the Middle East.
This MOU, which is infused with a strong sense of mutual collaboration, will allow Laing O’Rourke to provide its expertise within the construction industry in order to help support the junior’s development of low-carbon building materials for the construction industry on top of the commercialisation of AusPozz™.
Finally, in late September, ZEO completed a $13 million placement, receiving firm commitments from existing and new institutional, professional and sophisticated investors, who collectively subscribed for about 162.5 million new fully paid ordinary shares, at a price of $0.08 each, to raise $13 million (before costs).
This development, the company noted, ensured it would be well-funded to advance its strategic initiatives throughout 2026. Moreover, it was going to be underpinned by the cornerstone support of more than $6.6 million from existing and company-introduced investors, alongside some strong backing from institutional and sophisticated ones.
In terms of the commercial demonstration, ZEO used around eight tonnes of the AusPozz™ product, representing the company’s largest commercial trial to date. This exercise showcased how compatible this material was with mainstream concrete production systems.
The pour, the technology developer explained, demonstrated that AusPozz™ could integrate seamlessly into the concrete supply chain and was compatible with batching plants, transportation methods, pumping systems as well as placement techniques.
“AusPozz™” is seen as a key enabler of carbon reduction targets across the industry due to its capacity to significantly enhance strength development and therefore reduce the total cementitious content of the concrete, which can reduce the overall cost per cubic metre,” ZEO said.
Meanwhile, the off-take agreement sets out detailed binding terms for the supply of the company’s kaolin and cosmetic kaolin DSO products over an initial five years. Furthermore, it completes the binding off-take term sheet executed in August.
Based on committed volumes and year one pricing, this arrangement was valued at approximately $204 million, delivering an average net margin of more than 45 per cent across the initial term.
Additionally, under this scenario, capital costs to start mining operations were pencilled in at $7.6 million (excluding a contingency), comprising $4.8 million in the first year and $2.8 million during the second.
Fittingly, ZEO was assessing the opportunity to fund the second year capital requirements from year one operating cash flows.
When it came to the MOU with Laing O’Rourke, ZEO said this arrangement provided a framework for mutual collaboration, as well as for the engineering outfit to share its expertise with construction industry proponents, which in turn would support both the ASX-listed company’s development of low-carbon building materials for the construction sector as well as the commercialisation of AusPozz™.
As a result, the two parties agreed to conduct trials that incorporated the processing technology’s high-reactivity metakaolin product into Laing O’Rourke’s projects and tenders with internal and external clients.
Ultimately, these trials would provide further opportunities to demonstrate the practical use and benefits AusPozz™ could deliver in a live field setting in coordination with nominated concrete suppliers.
Finally, it was envisaged that the capital raising at the end of September would go towards the expenditure required to start mining at the Toondoon open pit, located about 230 kilometres south-west of the harbour city of Bundaberg.
It would also help progress definitive feasibility due diligence associated with AusPozz™. In addition, ZEO was looking to conduct an expanded drilling program at the site to target an increase in the resource and establish a maiden JORC-compliant ore reserve.
Toondoon has total measured (4.03 million tonnes) and indicated (6.84Mt) resources of 10.9Mt. Ore from the deposit, which is open in all directions, will be processed and stockpiled at Bundaberg Port.
The annual production target is 151,000t per annum of kaolin, with an initial 20-year mining operation expected to begin in the first half of next year.
According to ZEO, the global SCM market is forecast to reach around US$40 billion by 2030 as it provides the most viable alternative the cement sector has to mitigate carbon dioxide emissions.
In addition, the company plans to inject some $62.3 million in direct capital costs into the “conventional plant and equipment” utilised in its AusPozz™ circuit.
