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Neometals receives 50 cent price target from Euroz

Euroz is a Perth-based financial services company focused on the ASX.

growth concept shown by share price chart going up
Euroz provides stockbroking, corporate finance, funds management and wealth management services

Neometals Ltd (ASX:NMT) has received a Buy recommendation and price target of 50 cents per share from Euroz

With shares trading around 25 cents per share, the price target of 50 cents represents potential upside of 100%.

The company is building an integrated lithium business which began with its 13.8% interest in the operating Mt Marion Lithium Mine in Western Australia.

READ: Neometals pursuing multiple positions in the lithium supply chain

Recently, the company outlined plans to demerge its titanium and vanadium assets.

The spin-out will allow Neometals and the new company to separately focus on the development of their respective integrated lithium and titanium-vanadium strategies.

Euroz research report

The following is an extract from the Euroz report.

Comments

• NMT has announced its intention to demerge its Barrambie Titanium-Vanadium Project and associate non-lithium assets – completion set for Mar Q FY’19;

• This will provide for a vertically integrated lithium business to continue to evolve within the NMT structure whilst realise value for the emerging DSO Barrambie operation in the short to medium term;

• Longer term, NewCo will seek to advance potential development of downstream process flow sheets to produce high-purity vanadium and titanium chemicals;

• On our analysis, the demerger makes sense, with the market paying nothing for the remainder of the NMT business outside of its 13.8% stake in the Mt Marion lithium mine plus cash.

Market Sensitivity: Price Target: $0.50/sh - Valuation: $0.53/sh

Bull Scenario - $2.00/sh
NMT advances to commercialisation of Barambie DSO development and commercialisation of the LiOH processing plant and commercialisation of the Li-Ion Battery Recycling process.

Base Scenario - $0.50/sh
NMT advances to commercialisation of Barambie DSO development or commercialisation of the LiOH processing plant or commercialisation of the Li-Ion Battery Recycling process.

Bear Scenario - $0.25/sh
NMT fails to commercialise its other ventures outside of its core Mt Marion interest (EZL valuation - $0.26/sh)

Quick facts: Neometals Ltd

Price: 0.195 AUD

ASX:NMT
Market: ASX
Market Cap: $106.34 m
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Neometals secures lithium offtake and potential feedstock from Mt Marion...

Neometals Ltd (ASX:NMT) managing director Chris Reed updates Proactive Investors on the lithium developer’s recent divestment of its Mt Marion Lithium Project for $103.8 million.   As part of the sale agreement, Neometals has secured a binding life-of-mine annual offtake option...

on 27/3/19

2 min read