ASX-listed battery metal specialist, Neometals, has completed a Class 4 pre-feasibility study for production of titanium from ilmenite as well as iron-vanadium concentrate from its wholly owned Barrambie titanium and vanadium project near Sandstone, Western Australia.
Results from the study confirm the viability of commercialising the project with the potential to supply in excess of 500,000 tonnes per annum of high-quality supply constrained ilmenite in the first 10 years of the project.
Neometals have calculated an average pre-tax and uncosidated free cash flow of $136M per annum over the first 10 years before depreciation and amortisation with a probable ore reserve of 44.5 Mt at 18.7 percent titanium oxides, 44.1 per cent iron oxide and 0.61 per cent vanadium oxide.
The pre-feasibility study assumes a simple mine, crush, mill and beneficiate operation to produce a mixed gravity concentrate at Barrambie, followed by additional processing at a site east of Geraldton with lower cost natural gas supply. Importantly, the study confirms ‘value-in-use’ for Barrambie’s product basket and supports further conversations with potential offtake partner Jiuxing Titanium Materials.
Since 2003, Neometals has invested in excess of $40 million in the acquisition, exploration and evaluation of Barrambie. The company has in more recent times maintained a primary focus on recovering a titanium product from Barrambie to realise maximum value for shareholders.
Neometals Managing Director Chris Reed said: “These results highlight the robust potential economics for Barrambie’s development….The potential to bring in excess of 500,000 tpa of high-quality ilmenite to the market has high strategic value.”
Neometals holds a massive, near-surface 280 million tonne resource at Barrambie 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 deposit is a titanium-vanadium-rich magnetite body hosted within a suite of intrusive mafic rocks.
With the completion of the pre-feasibility study estimate for Barrambie, negotiation on a binding formal offtake can now begin for cornerstone offtake with Jiuxing according to the Memorandum of Understanding, or “MoU” currently in place.
The Jiuxing MoU identifies a path to a formal offtake agreement where Neometals supplies a mixed gravity concentrate or separate ilmenite and iron-vanadium concentrates from Barrambie to Jiuxing. Specifically, the MoU outlines an evaluation regime and contains the key
commercial terms for a formal offtake agreement subject to product evaluation from smelting trials. Ongoing negotiations with Jiuxing will consider all the start-up scenarios.
Neometals early contractor engagement process is underway and the pre-feasibility study will form a key component of the due diligencerequired by a successful ‘build-own-operate’ partner.
The company used a similar development model to advance its Mt Marion Lithium Project in 2015, which is now the world’s second largest producer of spodumene concentrates.
Management says a potential benefit of a staged development approach is the operation could begin to generate cashflow with a build-own-operate partner, whilst Neometals constructs the low temperature roast plant in parallel on an owner/operator basis. As a bonus, mixed gravity concentrate is a lower titanium grade intermediate feedstock, which if required can be blended with higher titanium grade ilmenites coming from other sourceslike traditional mineral sand operations and Jiuxing have expressed interest in this product.
Mixed gravity concentrate and ilmenite can be used as smelting feedstock to produce titanium slag which is then available as a downstream feedstock to product titanium pigment or metals. The high-vanadium iron concentrate can be used as feedstock for a typical primary vanadium salt-roast-leach operation or for blending with typical iron ores in a blast furnace. Vanadium is a common hardening alloy of modern steels.
Moving forward, Neometals is aiming to execute the formal agreement with Jiuxing in the first quarter of 2023 followed by the executing of the Build-Own-Operate contract.
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By Matt Birney
