Neometals to demerge vanadium project
Business News, Matt McKenzie, Thursday 16 August 2018, © Copyright 2018 Business News Pty Ltd.
West Perth-based Neometals will demerge its Barrambie vanadium and titanium project early next year, as the businesses gears up for a final investment decision on its planned Kalgoorlie lithium hydroxide refinery in mid-2019.
The Barrambie project is located in the Mid West and is solely controlled by Neometals .
It is intended to initially be a direct shipping ore operation, with smelting to take place in China, but there is scope for on-site processing.
In the demerger, shareholders will receive a slice of the new company proportional to their existing holdings in Neometals.
Azure Capital will be acting as adviser for the demerger process.
Neometals managing director Chris Reed said the business had reached a point where its two projects needed separate management.
“The company has reached an inflection point where both business arms need dedicated management, independent corporate structures and financial resources to realise optimal value,” Mr Reed said.
“Neometals has an enviable lithium portfolio and a disciplined strategy to minimise risk and maximise returns from its lithium feedstocks.
“We understand the incredible potential of Barrambie, and with the application of the same staged development strategy we have used in the lithium business, we have every confidence it will become a globally significant operation.
“The demerger creates an opportunity for shareholders to retain exposure to both businesses and capital markets will gain clarity, courtesy of simplified commodity focus and corporate structure.”
Neometals ’ Kalgoorlie lithium plant is currently undergoing front end engineering and design and feasibility work, which the business aims to complete this year.
A financing deal will be necessary before the development gets under way, however.
For the plant, Neometals will use lithium concentrate produced at the Mt Marion mine, where it retains a 13.8 per cent stake.