The American Pacific Borates Ltd (ASX: ABR) share price has plunged 9.6% after the company announced updates for its potential US listing and borate operations.
Image source: Getty Images
What's driving the ABR share price today
The ABR share price took a 25% plunge on Monday after the company announced that it would defer Phase 1A for its Fort Cady Borate Mine. Instead, the company intends to shift its focus to a larger borate operation and production of borate specialties combined with sales of boric acid.
Today's announcements reiterate the decision to defer Phase 1A into an all Phase 1 construction. The larger initial operation is expected to have stronger financial metrics and be more attractive for US market involvement.
ABR highlights borate as an essential material for green energy generation, permanent magnets for electric vehicles and wind turbines, energy storage applications and micronutrients to increase yield to reduce deforestation. Looking ahead, it intends to establish further partnerships focusing on borates for use in global decarbonisation initiatives.
It appears as though borate follows a rare-earths like narrative, where there is a global supply chain dependency on Turkey. The company believes its new supply will play a role in de-risk and drive supply chain diversification.
ABR eyes US listing
The update reaffirms the company's commitment to a strong and successful listing in the US by 2022. ABR believes the broad decarbonisation application of borate will draw attention from environment, social and governance (ESG) focused investors.
ABR is currently in discussions to advance potential US-based CEOs and CFOs with a view to making appointments in the short term. The company has also initiated engagement with US investment banks focused on equity, debt and driving its US listing.
Looking ahead
ABR retains a healthy $59.2 million cash in the bank effective 31 March 2021. The company believes that its cash position by 30 June 2021 will be meaningful.
With construction deferred, ABR is making an effort to upsize its existing project resource, progress new mine plan options and value-add borate applications.
The ABR share price is 9.68% lower at the time of writing to $1.54. This weakness is reflected in the 0.50% slump in the S&P/ASX 200 Index (ASX: XJO).
