Neometals proclaims tactical goals after sale

NEOMETALS has a wallet bulging with cash this morning after it completed the sale of its 13.8% stake in the Mount Marion lithium project to Ganfeng Lithium and Mineral Resources, freeing it up to focus on goals such as a lithium refinery project, battery recycling plant and developing a new mine at Barrambie.
Neometals proclaims tactical goals after sale Neometals proclaims tactical goals after sale Neometals proclaims tactical goals after sale Neometals proclaims tactical goals after sale Neometals proclaims tactical goals after sale

Neometals has sold out of Mt Marion.

Haydn Black


The Perth-based junior is now sitting on cash of A$131 million, topped up by the $104 million from the Mt Marion sale, plus $7 million in listed investments, and it is keen to advance a trio of "tactical priorities" for 2019, managing director Chris Reed said this morning. 
He promised the company would not be going on a cash splash to back any projects that tickled its fancy, but would "take a very measured approach to capital allocation" with a number of critical decisions firming before the end of the year.
However, a casualty has been a six-month-old plan to develop a proposed 10,000tpa lithium hydroxide refinery at Kalgoorlie, Western Australia.
As part of the Mt Marion sale the company entered into a life-of-mine off-take agreement for 57,000 tonne per annum of spodumene concentrate, a potential baseload source of feed for processing into higher margin lithium chemicals, but costs for the project look like being higher than earlier studies indicated. 
Given the recent fall in lithium prices, Neometals has decided to delay the feasibility study, but will continue with engineering studies and approvals. 
A planned demerger of the lithium chemicals projects that was announced last year is also on hold.
It will continue work on a zeolite project, one that could be integrated into the contemplated lithium refinery, to synthesise commercial grade zeolite from Mt Marion spodumene leach residue, potentially reducing costs for the plant.
A feasibility for the zeolite option is planned to be completed before the end of the year.
Barrambie, one of the world's biggest titanium and vanadium resources, remains a flagship project with Neometals also targeting a final investment decision before the end of the year.
An updated definitive feasibility, focused primarily on the vanadium, and a reserves update, are expected next month, and will feed into the search for offtake and financing partners and front‐end engineering and design studies.
The company has said Barrambie is "probably a couple of years ahead" of peers and is one of the most advanced vanadium project globally.
Also before the end of the year the company hopes to be in a position to start development of its first lithium‐ion battery recycling plant, with technology trials underway in Canada aimed at closing the cycle for battery metals.
Neometals shares were up 2.2% in morning trade to 23.5c, valuing the company less than its cash holdings at $128 million.