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Mineral Resources, Gangfeng pick up Neometals’ Mt Marion lithium stake

  • Wednesday, December 26, 2018
  • Source:ferro-alloys.com

  • Keywords:Mineral Resources,lithium stake
[Fellow]Mineral Resources, Gangfeng pick up Neometals’ Mt Marion lithium stake

[ferro-alloys.com]Chris Reed’s Neometals has offloaded its 13.8 per cent stake in the Mt Marion lithium project near Kalgoorlie, releasing $104 million for the company to pursue its downstream processing ambitions.

Neometals’ joint venture partners in Mt Marion — Mineral Resources and China’s Gangfeng — have agreed to buy out the minority stake, taking their ownership to 50-50.

The deal includes a binding life-of-mine offtake option covering 57,000 tonnes of spodumene concentrate, which Neometals plans to use as feedstock for its proposed lithium hydroxide plant, also near Kalgoorlie.

Mr Reed said the timing was right to realise the value of Mt Marion and strengthen the company’s balance sheet as it finalised multiple evaluation studies over downstream projects.

“The company is changing its focus and exposure away from upstream concentrates and pursuing a more holistic and integrated approach to the lithium battery thematic,” he said.

Neometals noted it had secured about $200 million from its initial $3 million Mt Marion investment, including the $89 million it derived from the original stake sales to MinRes and Gangfeng.

It said the project had delivered $34 million to share-holders in the form of dividends and share buybacks.

The company flagged the possibility of further payouts to shareholders from yesterday’s sale.

Neometals said it would have $130 million in cash reserves after the deal completed in February, subject to approval from Australian and Chinese regulators.

The company also announced yesterday that the proposed demerger of its Barrambie vanadium/titanium project 80km north-west of Sandstone would be deferred in light of the Mt Marion divestment.

Neometals had put its stake in Mt Marion on the market early last year but was unable to reach agreement with its partners because of a $125 million asking price.

MinRes and Gangfeng waived their rights, allowing Neometals to seek third-party buyers, but no other buyer emerged.

The announcement yesterday follows news last month that US lithium giant Albemarle would take 50 per cent of MinRes’ Wodgina lithium project in the Pilbara for $US1.15 billion.

The Neometals deal further boosts the Chris Ellison-led MinRes’ exposure to the lithium sector.

(The West Australian)

  • [Editor:王可]

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