PERTH (miningweekly.com) – ASX-listed Neometals plans to divest of its 13.8% stake in the Reed Industrial Minerals joint venture (JV) for $96-million.
The JV vehicle, which is held with fellow-listed Mineral Resources and China’s Ganfeng Lithium, owns the Mt Marion lithium project, in Western Australia.
Under the terms of the JV agreement, the project partners will have a 30-day period to exercise an option to buy Neometals’ share in the JV at the nominated price. If the JV partners do not exercise this right, Neometals can offer the stake to third parties.
Neometals chairperson Steven Cole told shareholders in a letter on Friday that the divestment of the company’s minority interest in the upstream Mt Marion mine and concentrator made strategic sense for the company, with the proceeds from the sale enabling the company to realise optimum value from its pipeline of other growth options.
Cole said that while Neometals was fully committed to the ongoing strength of the lithium battery thematic, it was timely for the company to redirect its capital and energy to higher-margin downstream opportunities, as well as the company’s titanium assets.
“Mt Marion has been an excellent investment for Neometals. Your company takes pride in having identified the significant opportunity presented by the lithium market and having successfully co-developed Mt Marion into the most significant new source of lithium feedstock in decades,” he added.
The project shipped its first product in February and is expected to produce some 280 000 t/y of 4% to 6% lithium spodumene concentrate.
Mineral Resources in August 2016 flagged the possibility of selling its 43.1% stake in the JV.