The optimisation review suggests the operation can scale up at a modest cost of A$2.3 million, doubling productive capacity to as much as 60,000 tonnes per annum "under certain operating conditions".

 

Production for the year to June 30 was 25,700 tonnes, an increase of 700t over the prior year.

 

With the company satisfied with the consistent operation of the plant, its work suggests equipment upgrades and process optimisation could enable it to meet nameplate of 60,000tpa, assuming the plant operates on a 24/7 basis. 

 

More realistically it anticipates a utilisation rate of 83%, for production of 50,000tpa from October 2023.

 

All-in sustaining costs are expected to fall by about 39% once the upgrades are complete to $359/t.

 

That would deliver earnings of around $8 million for 2023-24, a fourfold boost. 

 

It says the plant did produce at 50,000tpa in is earliest years, but worn out components and older technologies have affected operations in recent times.

 

Executive chairman Henk Ludik said the review had identified bottlenecks and optimisation opportunities at the 50-year-old plant if it wants to meet increasing demand for hydrous kaolin and other applications for emerging opportunities in carbon-reducing "green cement" by producing metakaolin.

 

Metakaolin is a premium product, which can increase pricing to between US$530-840/t,

 

Australia imports all its metakaolin.

 

Suvo purchased Pitting from France's Imerys in December 2020. 

 

Resources of 5.69Mt of kaolinised granite were declared in March, sufficient to support Australia's only hydrous kaolin producer for another 35 years.

 

The company raised A$7.5 million at 8.5c per share in March, and has around $9 million in cash to fund its expansion plans.

 

Pittong is located 40km outside the regional gold mining centre of Ballarat and is the only wet kaolin mine and processing plant in Australia. 

 

Suvo shares were last traded at 6.3c, valuing it at $43 million.

 

The stock has traded at 3.9-18c over the past year.