On behalf of the Board of Directors, it is my pleasure to invite you to become a
shareholder in WA Kaolin.
The IPO is intended to raise A$22.0 million through the issue of 110 million Shares at an
Offer Price of A$0.20 per Share together with 1 free attaching Option for every 2 Shares
issued (Offer), having raised A$7.65 million in a pre-IPO offering of Convertible Notes, to
capitalise the Company’s equity at A$56.56 million at completion of the Offer.
In recent years, the Australian resources and mining landscape has become largely
dominated by global companies. We are therefore pleased to offer this opportunity to
become a shareholder in an established Australian-based business with a history
spanning over two decades and a clear strategy to become a globally significant kaolin
The Wickepin Kaolin Project is located in the stable mining jurisdiction of Western
Australia and contains a current Mineral Resource (prepared and reported in accordance
with JORC 2012) of 644.5 million tonnes1 of high-grade premium kaolinised granite
located near Wickepin, 220 kilometres south-east of Perth.
Until recently, kaolin has been a little-known product, however demand is increasing as
the breadth of uses continues to grow across global markets, including the neighbouring
Asia Pacific region. Kaolin is used in various applications across numerous industries
including paper and plasterboard, ceramics, fibreglass, paints and coatings, plastics,
rubber, pharmaceuticals and medicine, cosmetics, concrete and agriculture.
Since acquiring its world class kaolin resource from Rio Tinto in 1998, WA Kaolin cofounders and owners have invested over $42 million to develop and progress the
Wickepin Kaolin Project. Through extensive R&D of product and processes, the
Company has spent significant time and funds in optimising its proprietary dry processing
method for kaolin (K99 Process) to build and extend on its success as a kaolin producer
and exporter to global markets.
This world-class resource at Wickepin is one of the largest remaining premium primary
resources of kaolin globally and is characterised by its purity, quality and brightness,
which has typically attracted higher prices from a growing collection of top tier customers.
The Company developed its proprietary K99 Process in a working plant at Kwinana,
south of Perth, which, together with the high-quality nature of the Wickepin resource,
delivers an ultra-bright kaolin with a low cost of production, compared with other
processes that use chemical bleaching and multiple wet mechanical and magnetic
separation methods. The Kwinana plant is currently producing at a rate of up to 5 tonnes
per hour and is operating on a 16 hour per day, 5 day per week roster.
In May 2020, the Company formalised an offtake agreement with one of its key
customers, Dak Tai Trading Limited, for the supply of 338,000 tonnes of kaolin over six
years. It also has in place informal arrangements with other key distributors and
customers which further support the Company’s targeted production of kaolin.
WA Kaolin intends to put the Offer proceeds towards its staged expansion program which
involves the construction of a new processing plant at East Wickepin for the purposes of
scaling up kaolin production to 200,000 tonnes per annum by the end of 2022 with ramp
up to 400,000 tonnes per annum by the end of 2023 (see Section 3.5).2
A definitive feasibility study completed by BDB Process Pty Ltd in September 2020 (DFS)
has detailed a robust ramp up of kaolin production to 400,000 tonnes per annum only,
with significant scope remaining to further increase the production capacity, due to the
very large Mineral Resource inventory within the current mining lease which contains
54.5 million tonnes of kaolin and remains open laterally (see Section 3.2(g)).
The Company is pleased with the findings in the DFS.
The Company’s objective is to continue to add on 200,000t modules in stages with the
implementation of each subsequent stage subject to a range of factors, including
demand, funding and approvals.
The WA Kaolin Board and Executive team have extensive experience in project delivery
and business development. The co-founders and current owners will maintain their
involvement in the Company and are incentivised to deliver key milestones in line with a
commitment to grow the value of the business to the benefit of all shareholders.
This Prospectus contains detailed information about the Company, its business and the
Offer, as well as the key risks associated with an investment in the Company (Sections
1.2 and 6) and I encourage you to read this Prospectus in its entirety before deciding
whether to invest in the Company.3
On behalf of the Directors, I look forward to welcoming you as a shareholder in the
Dr John White
WA Kaolin Limited