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Neometals updates from Mount Marion following Mineral Resources results

Neometals has a 13.8% stake in the Mt Marion Lithium Project.
Neometals updates from Mount Marion following Mineral Resources results
The Mt Marion Lithium Project

Neometals Ltd (ASX: NMT) currently holds a 13.8% stake in the globally-significant Mt Marion Lithium Project in Western Australia.

Minerals Resources Ltd (ASX:MIN) (43.1% stake) is the project operator and Australia’s largest contract minerals processor.

The final partner is Ganfeng Lithium (43.1% stake), which is China’s largest, most diverse lithium producer.

Neometals comments on Mineral Resources FY17 results

Neometals noted the announcement by MIN of its full-year financial results for FY17.

MIN's announcement reports EBITDA per tonne for Reed Industrial Minerals Pty Ltd (RIM), the project vehicle for the Mount Marion Lithium Project, which equates to $14 million during the second half of FY17 and forecasts approximately $72 million for the first half of FY18.

Neometals 13.8% (reflecting NMT’s shareholding in RIM) of the 2H FY17 EBITDA is circa $2 million and of the 1H FY18 forecast EBITDA would be around $10 million.

RIM has a positive obligation to distribute profits to the maximum extent.

However, the receipt by NMT of any earnings achieved by RIM will be subject to the RIM board resolving to pay dividends to its shareholders, having regard to (among other things) tax obligations, the future capital requirements of the business and the repayment of outstanding shareholder loans.

Neometals outlined that it was not involved in preparing the information regarding RIM released by MIN.

However, Neometals added that it is not aware of any reason why the information is incorrect as released by MIN, the operator of the Mount Marion Lithium Project (via its wholly owned subsidiary, Process Minerals International Pty Ltd).

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