Neometals to Demerge Vanadium-Titanium Assets

Australia-based Neometals (ASX:NMT) is set to demerge its vanadium-titanium Barrambie asset in Western Australia into a newly listed company, the miner announced on Thursday (August 16).

The new entity, NewCo, will focus on feeding into China, which is experiencing a supply shortage. NewCo will develop the Barrambie project as a direct-shipping ore operation, and will continue to evaluate the use of processing technologies on site to produce high-purity chemicals in the future.

As a result of the demerger, Neometals will be able to increase its focus on the Mount Marion lithium project and the Kalgoorlie processing facility in Western Australia.

“The company has reached an inflection point where both business arms need dedicated management, independent corporate structures and financial resources to realize optimal value,” said Christopher Reed, Neometals’ managing director.

Neometals, which says Mount Marion hosts one of the world’s largest lithium-mining and concentration operations, is currently evaluating the possibility of processing its spodumene offtake rights from the asset into higher-value lithium hydroxide.

The company will also continue to advance its lithium battery recycling project to recover lithium, cobalt and other metal by-products.

“Neometals has an enviable lithium portfolio and a disciplined strategy to maximize risk and maximize 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,” Reed added.

According to the company, Barrambie is one of the world’s highest-grade titanium deposits and also hosts high-grade vanadium mineralization.

If the proposal is approved, the demerger will be completed in the March quarter of 2019, after which the company will seek a listing on the Australian Securities Exchange.

Neometals said shareholders will receive shares in NewCo that are proportional to their existing Neometals holdings. The company will also ensure NewCo is appropriately funded at the time the demerger is implemented.

On Thursday, shares of Neometals closed flat in Sydney at AU$0.30.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.