The sale increases the company’s cash balance to around $131 million plus $7 million in listed investments.
As part of the sale agreement, Neometals has secured a binding life-of-mine annual offtake option for 57,000 tonnes per annum of 6% spodumene concentrate from the mine.
Importantly, this option provides Neometals with potential feedstock for downstream processing into higher‐margin lithium chemicals.
The company’s development priorities are its Barrambie Vanadium Titanium Project, its lithium-ion battery recycling project, and its lithium downstream strategy.
Strong cash position provides options
The company’s core strategy remains focused on de‐risking and developing long-life projects with strong partners, and integrate down the value chain.
Neometals’ managing director Chris Reed said: “We will continue to take a very measured approach to capital allocation and the timing of investment decisions of multiple advanced projects in our portfolio.
“We are fortunate that despite challenging capital markets we retain significant flexibility and optionality with respect to the timing, quantum and structure of investment into the development of our portfolio of exciting growth projects.”
Barrambie is the company’s flagship asset
The Barrambie project is one of the world’s biggest titanium and vanadium resources and remains a flagship project with Neometals targeting a final investment decision (FID) in 2019.
An updated definitive feasibility study (DFS) for the development of a primary vanadium operation at Barrambie and updated Ore Reserve estimate are due for release in April 2019.
This will form the basis of the formal offtake, partner and financing processes to be run in parallel with vendor test work, front‐end engineering and design studies and approval processes.