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Neometals enters option for lithium hydroxide refinery site

The site is located 70 kilometres by road from the Mt Marion lithium operations.

 Horizons of growth image depicting the Neometals transition downstream into the lithium value chain
The company's transition downstream into the lithium value chain

Neometals Ltd (ASX:NMT) has entered into an option agreement to sub-lease a 40-hectare site in Kalgoorlie for its proposed lithium hydroxide refinery.

With a lithium hydroxide plant, Neometals aims to take lithium concentrate feed from its nearby 13.8% owned Mt Marion lithium operations and convert it to the higher value lithium hydroxide product.

The site is in a new industrial estate at West Kalgoorlie on the Great Eastern Highway, 70 kilometres by road from the Mt Marion lithium operations.

WATCH: Neometals Ltd looking to move downstream towards lithium chemical production

Neometals’ CEO Chris Reed said: “Neometals has been investigating sites for some time and this Kalgoorlie location makes a lot of sense.

“The strategy to move Neometals downstream towards lithium chemical production is part of a broader evolution of our lithium business arm.

“The aim is to develop a closed loop lithium ecosystem with access to the lithium raw material source, value adding for use in the battery supply chain and ultimately, recycling of spent batteries.

“We are already part of the global lithium supply chain which gives us clear industry insights and confidence in the future demand outlook for lithium hydroxide from hard rock.”

Two-year option to allow for studies

The agreement provides Neometals with a two-year option over the site with a provision for an additional two-year extension.

During this time Neometals will undertake due diligence and front end engineering design (FEED) studies as part of a broader project feasibility study for the refinery which is underway.

Reed added: “Kalgoorlie is not only very close to our Mt Marion operation and all the services that a first-class mining town brings, but it also provides a cost advantage owing to the removal of transport, shipping and taxes.

“Reducing transport reduces the environmental footprint which supports margins, but it’s also a critical consideration for the end users who must account for the full life cycle of the materials they consume.

“Add to that Kalgoorlie’s land availability, leasing rates, access to power/water/gas and a willing local workforce - and the location becomes very compelling.”

MoU signed related to proposed refinery

Neometals and the City of Kalgoorlie-Boulder have executed a memorandum of understanding (MoU) providing for assistance in procurement of certain infrastructure and utilities for the proposed lithium refinery.

Next steps in advancing lithium business strategy

The next key steps for Neometals to advance its lithium business arm objectives include:

• Continuing due diligence, FEED and feasibility studies for the refinery;
• Advance off-take dialogues and the formal partner selection process;
• Working with the City of Kalgoorlie Boulder to progress fundamental service agreement terms including provision of access roads, reclaimed water pipeline etc for the refinery; and
• Finalising the KLR funding strategy.

Neometals expects to make an investment decision in relation to the refinery in the June quarter of 2019.

Quick facts: Neometals Ltd

Price: 0.2 AUD

Market: ASX
Market Cap: $109.07 m

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