Neometals has moved a step closer to production at its massive Barrambie titanium-vanadium deposit in WA after inking a Memorandum of Understanding, or “MOU” with leading Chinese titanium slag producer, Jiuxing Titanium Materials. The agreement contains the framework for a long-term offtake agreement for either mixed or single metal titanium and vanadium concentrates, with the contract likely to put Barrambie on the fast-track to production.
Neometals MOU with Jiuxing complements an agreement inked back in 2019 with the Institute of Multipurpose Utilisation of Mineral Resources Chinese Academy of Geological Sciences, or “IMUMR”.
IMUMR, who has been working with Neometals to develop a beneficiation scheme for the Barrambie ores, recently completed successful pilot scale beneficiation work in partnership with the company .
The concentrates produced by IMUMR are now being smelted by Jiuxing and other interested parties to produce both titanium and vanadium end products.
Neometals Managing Director, Chris Reed said: “This MOU is an exciting milestone for Neometals and the Barrambie Project. It validates our long‐held belief in the shift by the Chinese Titanium pigment industry to the more environmentally friendly Chloride processes, requisite step‐change in demand for chloride‐grade titanium slag and the ability of Barrambie to help meet these supply needs.
“In parallel we continue to advance our early contractor engagement process to ensure Barrambie can be expeditiously brought into production.”
The company’s Barrambie deposit is located around 80km north of Sandstone in Western Australia’s Murchison region. The project also lies 465km east of the port of Geraldton and is connected to the export facility by a well-developed network of gravel and paved roads. The deposit is a titanium-vanadium-rich magnetite body which is hosted within a suite of intrusive mafic rocks.
Neometals exploration and development program at Barrambie has outlined a massive, near-surface 280 million tonne resource grading 9.18 per cent titanium oxide and 0.44 per cent vanadium pentoxide, positioning the specialty metal deposit as one of the world’s largest undeveloped titanium resources.
The company has now advanced Barrambie through to a decision to mine, with the WA government having already approved the mining proposal for a 1.2 million tonne per annum mining operation and Ministerial Approval is now in place for the construction of a processing plant on site.
The IMUMR test work has advanced the project to a “pilot scale” test work and confirms that the vanadiferous titanomagnetite ores from Barrambie can be beneficiated via simple gravity separation to produce a mixed concentrate. This product can then be further processed, utilising roasting and magnetic separation to manufacture two distinct concentrate streams, namely a high-quality ilmenite-titanium concentrate and an iron-vanadium-rich product.
Jiuxing, who is looking to purchase the Barrambie’s concentrate’s, is the largest chloride titanium slag producer in north eastern China. It controls around 12 per cent of the Chinese chloride slag market - an impressive feat considering it has only been in operation since 2008. The company supplies its slag products to the likes of CITIC Titanium and China BaoTi for the manufacture of various pigments for use in paints, plastics and inks.
The MOU proposes that, subject to due diligence, Neometals will enter into a formal offtake agreement with Jiuxing to supply either 800,000 tonnes of mixed concentrate or 500,000 tonnes of ilmenite and 275,000 tonnes of iron-vanadium concentrate per annum. Importantly, the agreement contemplates a “take or pay” offtake, demonstrating that Jiuxing is likely a serious counterparty with either deep pockets or a solid customer base.
It will look to cover the first 5 years of production and pricing will be based on published market values and subject to an agreed price floor.
Jiuxing’s due diligence is already underway utilising samples provided by IMUMR, however the litmus test of the project is likely to come later this year when Neometals will mine a bulk sample from Barrambie and refine 100 tonnes of mixed metal concentrate for testing. Jiuxing will utilise this sample for commercial-scale testing through its titanium smelter and should this work prove successful, the two companies envisage the execution of a formal offtake agreement in the first quarter of 2022.
In anticipation of a move to active operations, Neometals has already begun to engage with various contractors for the construction of the milling facility and mining at Barrambie. The company is looking to follow the same successful model it employed at its Mt Marion lithium mine near Norseman in WA and develop a complete “build, own and operate” operation that would see Neometals provide a total mine to port solution for its customers.
In other news Neometals has also divested the gold rights to much of its peripheral tenure at Mt Edwards south of Kalgoorlie. In a deal with Eastern Goldfields focussed Auric Mining, Neometals will pick up $200,000 in cash and a further $700,000 worth of shares in return for the gold rights over 13 of its granted tenements and a further 8 applications. The deal leaves Neometals free to focus on the development of Barrambie whilst its tenure on the Widgiemooltha Dome is kept in good standing through Auric’s ongoing work program.
With the company having received the key mining approvals for Barrambie and Jiuxing now advancing with its due diligence program to lock up the offtake from the deposit, Neometals is now looking like a real chance to build its second speciality metals mine.
The ASX-listed company practically wrote the rule book about how you get a mine up and running as a junior company when it managed to pull together a three-way partnership with Mineral Resources and Chinese firm, Ganfeng Lithium at Mt Marion.
Barrambie therefore is not its first rodeo and with a solid success under its belt already at Mt Marion, this is one ASX-listed junior that should be taken seriously when it says it is going to build a mine.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
