Neometals will demerge its valuable Barrambie project and associated non-lithium technology assets into a new ASX listed entity, allowing the parent company to focus on its advanced lithium business. The new company will oversee the initial development of the massive Barrambie titanium-vanadium project and create a direct shipping operation of magnetic concentrates out of W.A.
Neometals will demerge its Barrambie titanium-vanadium project and associated non-lithium technology assets into a new ASX-listed entity, allowing the parent company to fully focus on developing its quality lithium downstream business.
The new entity will be responsible for overseeing the initial development of the massive Barrambie project and will look to create a direct shipping operation of vanadium-rich titanomagnetite concentrates.
It will then evaluate the possibility of on-site production of high-purity titanium and vanadium chemicals utilising the proprietary Neomet process.
According to Neometals, the demerger is expected to be completed in the March quarter of 2019, subject to all required approvals and consents.
The separation of the distinct businesses will unshackle the parent company so it can push ahead with the feasibility study for its proposed Kalgoorlie lithium hydroxide refinery.
It will also mount a full exploration assault on its highly prospective Mt Edwards lithium project near Kambalda in W.A.
The 100% owned Mt Edwards project is only 40km down the road from the Mt Marion lithium operations, where Neometals still retains a strategic 13.8% stake holding in one of the world’s largest spodumene mining and concentration operations.
The company will also continue to advance its lithium battery recycling project to recover lithium, cobalt and other metal by‐products from the processing of off-specification and end‐of‐life batteries.
Neometals Managing Director Christopher Reed said: “The Company has reached an inflection point where both business arms need dedicated management, independent corporate structures and financial resources to realise optimal value. Neometals has an enviable lithium portfolio and a disciplined strategy to minimise risk and maximise returns from its lithium feedstocks.”
Neometals Chairman Steven Cole added: “This announcement marks the culmination of extensive planning and hard work, and places Neometals and its shareholders in a very strong position moving forward. Neometals has always viewed Barrambie and its portfolio of processing technologies as significant strategic assets.”
“NewCo will be an independent and separately run business with access to expertise from Neometals management who have a proven track record in project development.”
Barrambie is a globally significant hard-rock titanium-vanadium asset, with the company recently announcing a JORC-compliant mineral resource of 280 million tonnes grading 9.18% titanium dioxide and 0.44% vanadium pentoxide to a vertical depth of only 80m.
Recent metallurgical test work results produced some very encouraging results with excellent recoveries of titanium, vanadium and iron into magnetic concentrates, potentially indicating a simple and conventional processing route for the Barrambie ores.
There are not too many ASX listed juniors who have a track record like Neometals does of developing exotic metals mines.
The company’s Mt Marion lithium mine near Coolgardie effectively re-wrote the corporate play book about how a small cap company develops a mineral resource without blowing up its capital structure.
If Barrambie is to be Mt Marion mark 2, then this latest move to demerge is probably a good start.