At a time when junior miners are screaming for cash, no such problem exists at the David and Chris Reed led Neometals. Last quarter the company reported cash of $31m and today they announced their Chinese partner in the Mt Marion Lithium project near Coolgardie will pay them another $38m to increase their stake in the project.
Last quarter the company reported a cash balance of $31m and today they announced that their Chinese partner in the Mt Marion Lithium project near Coolgardie will pay them another $38m to increase their stake in the project.
In a sure fire sign that Mt Marion is on track to deliver when it kicks into production midyear, Ganfeng Lithium Co, China’s leading Lithium producer has accelerated their option to acquire another 18.1% of the project for $38m.
Today’s move will see Neometals now hold 26.9% of the project, their heavyweight partner Mineral Resources holds 30% and Ganfeng have increased to 43.1%.
Mineral Resources, who are earning into the project by funding its constriction, have an option to acquire an additional 13.1% of the project from Neometals at the same price paid by Ganfeng. This would take them up to 43.1% equaling Ganfeng’s holding.
The expiry date of Mineral Resources call option is linked to certain milestones at the Mt Marion Project, expected to be achieved in Q4 of 2016.
If Mineral Resources do not take up their option to increase their stake, then Ganfeng have the right to do so up to a cap of 49% of the project by purchasing further shares from Neometals.
Additionally Neometal’s hold a put option over Mineral Resources shareholding to potentially increase their stake from 26.9% up to 34.14% in the event that Mineral Resources do not exercise their call option with Neometals.
The Mt Marion project has to-date been an amazing success for the junior miner in a depressed market and with production just around the corner, the company is about to hit its straps.
The partnering with Mineral Resources who are funding the construction of the plant and with Ganfeng who have a 100% take or pay off take agreement was first class and has set the scene for Neometals to show other junior’s just how you get an idea into production in this state.