Last week I attended the Noosa Mining virtual conference. By far one of the most interesting presentations was from Diatreme Resources who plan to become a top Australian producer of high-quality silica sands. These industrial minerals businesses are great cashflow generation, portfolio companies given their low capital intensity and ability to generate strong, consistent cashflow over their asset life.

Growth in the solar industry, driven by an increasing desire for many to shift to renewable energy and self-sufficiency, means that the demand for high purity silica sands is only going to continue to grow.

And that was easy to see pre-2020. Now it’s becoming clear that the renewables sector will grow exponentially through the post-COVID rebuild with the support of green Government policy.

Diatreme’s project in Queensland is particularly exciting given its extremely high-quality sand (99% silica oxide), large resource (47 m tonnes), low capital intensity, and it’s location in a friendly jurisdiction.

I believe this is one of the best-positioned silica sand projects coming to market in the next 5 years, to capitalise on the massive expected demand.

You can view the full presentation here.