Latest From Mineral Resources On Enhanced Stake In Neometals’ Mt Marion Lithium Project

  • Mar 19, 2019 AEDT
  • Team Kalkine
Latest From Mineral Resources On Enhanced Stake In Neometals’ Mt Marion Lithium Project

Mineral Resources Limited today announced the acquisition of additional stakes in the Mt Marion Lithium Project based in the Goldfields of Western Australia. The news sent the stock price to edge up by 1.349% to last trade at $16.530 on 19 March 2019.

In the announcement to Australian Securities Exchange, Mineral Resources Limited (ASX: MIN) informed that it has completed the execution of sale agreement with Neometals Ltd to acquire Neometals’ 13.8% equity interest in Mt Marion for a cash consideration of A$103.8 million. MRL executed the contract in collaboration with Ganfeng Lithium Co. Ltd as both MRL and Ganfeng will be the joint and equal owner of Mt Marion.

The acquisition of the additional equity interest in Mt Marion is well in line with the company’s growth strategy of identifying value-adding opportunities in the lithium sector.

It has been understood that MRL has already paid the portion of its cash consideration that comprises of A$51.9 million. Following this payment and the receipt of all relevant approvals, a subsidiary of MRL Process Minerals International Pty Ltd has increased its equity interest in Mt Marion from 43.1% to 50%.

As part of the Mt Marion equity sale agreement, the parties also inked a binding life?of?mine annual offtake option for 57,000 tonnes per annum of Mt Marion 6% spodumene concentrate at market-linked prices. In this way, the offtake agreement will secure the interest of Neometals Ltd (ASX: NMT) by providing it with the proven base?load feed source to downstream process into higher?margin lithium chemicals.

Neometals has subsequently ramped up its operation at Kalgoorlie Lithium Refinery Project with the development plans to supply lithium hydroxide to the battery cathode industry underpinned by a binding life?of?mine annual offtake option for 57,000 tonnes per annum of Mt Marion 6% spodumene concentrate.

More Interestingly, Neometals confirmed its ability to synthesise commercial grade zeolite from Mt Marion spodumene leach residue and has been pursuing the opportunity to add co?product revenue and reduce waste disposal costs to significantly improve the projected KLR competitive cost position.

The global market for lithium has been growing at a rapid pace primarily driven by its use in the manufacturing of electric vehicles. Therefore, Neometals maintains its optimistic outlook for lithium which is expected to show strong demand in future driven by the electrification of transport and storage of renewable energy.

MIN last traded at $16.530 with a price to earnings multiple of 25.020x and a market capitalisation of $3.07 billion. The stock has recovered in the past three months following the dip of 7.75% over the past 12 months.

In today’s trading session, Neometals’ stock price surged by 4.348% to last trade at $0.240 on 19 March 2019. NMT last traded at a price to earnings multiple of 7.40x with a market capitalisation of $125.11 million. In the long-run, NMT has been on the downswing with the stock price declining 34.29% over the past 12 months, including an 11.54% negative movement recorded in the last six months.

Also Read: Mineral Resources announced Q319 sale price of $US 791.84/dmt for Mt Marion Project


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