Neometals Ltd (ASX: NMT) explores and develops mineral projects. The Company focuses on the exploration and development of its lithium, titanium, vanadium and other base mineral properties.
The company has through the latest release on ASX provided with a presentation in the BAML Battery & Storage Forum. The presentation was focussed on the following highlights:
Mt. Marion Equity Divestment Highlights:
NMT is slated to sell its Mt Marion equity to Ganfeng and Mineral Resources. Hence, a revised framework has been put into place for the purpose of generating quality lithium chemicals, which would be backed by the conformity from the proven feed supply. This divestment will strengthen the financial position of the company. Also, this will support the financing and partner selection process for the Kalgoorlie Lithium Refinery.
This strategic move was taken so as to shift the company’s exposure from the upstream spodumene production, and to pursue the lithium battery towards the value/supply chain. A robust balance sheet with offtake volume certainty will help the NMT project finance and offtake/partner selection processes.
Key Terms of Divestment:
As per the terms of the pact, the company has agreed to sell its 13.8% stake in the Mt Marion JV Company (Reed Industrial Minerals, “RIM”) for total cash consideration of A$104 Mn (NMT carried tax losses A$115 Mn). This process is expected to get completed by the 28 February 2019. Also, the company is targeting 31 January for the purpose of completion, but that is impending upon the upon the various approvals which are required for the transaction. The company and RIM parties are to engage in an offtake option agreement at completion. The Pricing would be correlated with the prevailing lithium carbonate and hydroxide prices which would be revised with quarterly resets.
The company also exhibited the various prominent business drivers for development which stated that the firm has been successful enough in proving the concept of producing the type of zeolite which is commercially sought in the markets. Australian Provisional Patent has lodged that, Synthetic zeolites are high value engineered materials and their applications include water removal from gas streams, gas cleaning, adsorbents, molecular sieves, and catalysts. The residue displaces high purity industrial chemicals and also reduces the production cost.
Neometals is still considering the demerger of its Barrambie Titanium-Vanadium Project (“Barrambie”) and associated technology assets into a new ASX-listed company. There is no change to proposed demerger structure, timing is however under review. Mt Marion equity sale will reset some approvals processes (ASX, ATO). Guidance on timing will be given once the Mt Marion equity sale is settled, which is expected to be completed in February 2019.
In the meantime, the stock price of the company has fallen by 23.33 percent in the past six months as on 14 January 2019. NMT’s shares trading flat at $0.230 with the market capitalization of circa $125.11 Mn as on 15 January 2019.
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