Neometals offers five great opportunities for the price of one
One of the first rules of investing is don’t put all your eggs in one basket. Diversification adds layers of protection and opens up new opportunities as you will read below.
Neometals Ltd. (ASX: NMT) is not just another lithium company as they also have nickel, titanium, vanadium and coming soon, processing and recycling. Neometals has two key divisions – a fully integrated lithium business and a titanium-vanadium development business. Both are supported by proprietary technologies that assist downstream integration through revenue enhancement and cost efficiencies.
Neometals offers five great opportunities
1) Lithium mining. Neometal’s owns a 13.8% stake in the Mt Marion lithium mine near Kalgoorlie, which is currently producing lithium spodumene. Neometals project loans are now all fully paid off and the project is profitable and cash flow positive.
2) Lithium processing. Neometals is currently assessing the possibility for a 20,000 tpa lithium hydroxide plant near Kalgoorlie Western Australia. The plant will potentially be fed from Mt Marion, Mt Holland and Mt Edwards lithium spodumene projects, commencing processing in 2021 assuming it goes ahead. Neometals has also arranged a 2 year option to sublease a 40 hectare site near Kalgoorlie.
3) Lithium-ion battery recycling. Neometals have completed a scoping study showing they can recycle cobalt from lithium-ion batteries. The study showed cobalt could be recycled for as low as US$4.45/lb Co (US$10k/t). The company has a pilot plant in Montreal Canada. Neometals plan to bring in a partner and say that the project can be up and running after 3.5 years.
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4) Titanium and Vanadium. The 100%-owned Barrambie Titanium-Vanadium Project in Western Australia’s mid-west is one of the world’s highest grade hard-rock titanium-vanadium deposits. Titanium is a small market mostly involving super strong alloys. There is a possibility that titanium may be used in the future for lithium ion battery anodes, due to its extreme strength. Vanadium is mostly produced as a by-product from processing titanium iron ore. Vanadium is rapidly gaining popularity especially in China for energy storage in the form of Vanadium Redox Flow Batteries (VRFBs) and for the steel hardening industry as just 0.05% vanadium doubles the strength of steel. Also demand for vanadium in China has increased as new rebar laws are now forcing builders to increase the strength of the steel that is used. This has resulted in the vanadium price rising over 5 fold in the past year.
Note: Neometals plans to demerge Barrambie Titanium‐Vanadium Project and associated non‐lithium technology assets, subject to shareholder/regulatory approvals and third‐party consents.
The ELi process, converts spodumene concentrate into a high purity lithium chloride solution, then uses “electrolysis” to produce high purity lithium hydroxide and lithium carbonate.
Lithium Titanate Anode production which shows the potential to replace graphite anodes.
The Alphamet – Neomet Process designed to effectively extract valuable metals for a wide spectrum of base, light and precious metal oxides and sulfides, intermediates and waste feeds.
Zeolite – Neometals are successfully turning engineered material out of spodumene leach residue into a product called Zeolite. Zeolites can be used to remove carbon dioxide (CO2) in air purification, moisture and hydrogen sulfide (H2S) from natural gas and in catalyst protection, among other things.
Neometal’s Managing Director Chris Reed said: “External market studies show a large addressable market where we have what appears to be a clear competitive advantage associated with zero cost feed material. Conversion of spodumene leach residues into a sale-able zeolite co‐product also creates an opportunity to significantly reduce lithium production costs”.
With a market cap of AUD$138M Neometals Ltd. will continue to develop projects and bring in partners to reduce their upfront running costs. Neometals is debt free, cashed up, cash flow positive, and have already paid a dividend to shareholders. Additional revenue streams from licensing and third party royalties for some of their IP processes involving lithium extraction, processing, or recycling will also be welcoming.
Neometals certainly do have their fingers in many promising investments, and are not putting all their eggs in one basket. A great company making all the right moves.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>