Neometals is increasing focus on the development of its Mt Marion lithium operations and proposed Kalgoorlie refinery in Western Australia through a restructure.
The company’s Barrambie titanium-vanadium project and associated assets will be demerged to create a new, separate entity, NewCo.
Neometals’ board of management claimed the non-lithium assets were not attracting fair value under its current company structure.
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.”
The demerger will ultimately allow Neometals to maximise returns from its offtake rights to Mt Marion lithium concentrate, under the Kalgoorlie lithium refinery project (KLR).
Neometals jointly owns KLR (13.8 per cent) with China’s lithium producer Jiangxi Ganfeng Lithium (43.1 per cent) and local mining services business (43.1 per cent).
The KLR hosts one of the world’s largest lithium mining and concentration operations. It will see Neometals’ offtake rights converted into higher-value lithium hydroxide.
Additionally, Neometals will also advance its recycling project of lithium batteries in Montreal, aimed to recover lithium, cobalt and other metal by-products.
The recycling project is believed to create a significant competitive advantage for the business in the future.
Test work in the battery recycling pilot plant is on track for completion within this year, before entering into the final engineering study stage.
In the titanium-vanadium side of the business, NewCo will be created to focus on feeding into China’s titanium and vanadium market, which is experiencing a supply shortage. The titanium-vanadium market is currently characterised by strong global demand and commodity pricing.
NewCo will also advance its development of mineral processing technologies, which may become Barrambie’s on-site processing options.
Neometals will ensure that NewCo is appropriately funded at the time the demerger is executed.
Shareholders will receive their shares in NewCo that is proportional to their existing Neometals holdings.