24
April 2024
Neometals
Ltd
("Neometals" or "the
Company")
Quarterly Activities
Report
For the quarter ended 31
March 2024
Highlights
Corporate
·
Cash balance of A$14 million, investments,
receivables and inventories of A$17.3 million and no
debt.
OPERATIONS
Lithium-ion Battery Recycling (50% NMT via Primobius GmbH, an
incorporated JV with SMS group GmbH)
· Final
purchase order (€18.8M) received from Mercedes-Benz for the
refinery "Hub" section of
the 2,500tpa integrated recycling plant being built by Primobius in
Kuppenheim, Germany;
· Mercedes-Benz plant designed to industrially validate our
technology and enable Primobius to offer its first commercial scale
(~20,000tpa) plant supply agreement to a subsidiary of Stelco Inc
by 30 June 2025 under existing technology licensing agreement;
and
· Primobius advanced discussions for plant supply and licensing
with participants across the entire EV battery supply chain, fourth
national phase patent granted, remaining thirteen being prosecuted
to grant.
PRE-COMMERCIAL
TECHNOLOGIES
Lithium Chemicals (70% NMT, 30% Mineral Resources Ltd via Reed
Advanced Materials Pty Ltd ("RAM")
· RAM
finalising preparations for commencing final stages of pilot plant
test work program following cessation of discussions with Lifthium
Energy SA in relation to co-funding commercialisation;
and
· RAM
advanced evaluation of potential brine feedstocks from lithium
producers and developers as part of its technology licensing
business model.
Vanadium Recovery (100% NMT via Avanti Materials
Ltd)
· Advanced discussions with potential licencees of the
technology following decision not to construct Vanadium Recovery
Project in Finland. Vanadium price remains down ~50%
year-on-year.
RESEARCH AND
DEVELOPMENT
· Commenced evaluating third-party technology for recovering
precious metals from industrial waste streams in the US.
UPSTREAM MINERAL
PROJECTS
Barrambie Titanium and Vanadium ("Barrambie") (100%
NMT)
· Tenement maintenance activities in parallel with preparations
for asset divestment.
Spargos Lithium and Nickel Project (100%
NMT)
· Review
concludes low potential for discovery of lithium bearing
pegmatites. Preparation for asset divestment.
Company
Overview
Neometals facilitates sustainable
critical material supply chains and reduces the environmental
burden of traditional mining in the global transition to a circular
economy.
The Company is commercialising a
portfolio of sustainable processing solutions that recycle and
recover critical materials from high-value waste
streams.
Neometals' core focus is on the
commercialisation of its patented, Lithium-ion Battery ("LiB") Recycling
technology (50% NMT), under a plant supply and technology
licensing business model. Primobius GmbH is the 50:50
incorporated JV with 150-year-old German plant builder, SMS group
GmbH, that is commercialising the technology. Primobius is building
a 2,500tpa recycling plant for Mercedes-Benz under a long-term
Cooperation Agreement. It also operates its own LiB disposal
service in Germany and plans to offer its first commercial
21,000tpa plant to North American licensee, Stelco, in JunQ
2025.
Neometals is also developing two
advanced battery materials technologies for commercialisation under
low-risk, low-capex technology licensing business
models:
· Lithium Chemicals (70%
NMT) - Patented ELi™ electrolysis
process, co-owned 30% by Mineral Resources Ltd, to produce battery
quality lithium hydroxide from brine and/or hard-rock feedstocks at
lowest quartile operating costs. Pilot scale test work and
Engineering Cost Study update planned for completion in DecQ 2024;
and
· Vanadium Recovery (100%
NMT) - Patent pending
hydrometallurgical process to produce high-purity vanadium
pentoxide from steelmaking by-product ("Slag") at lowest-quartile
operating cost and carbon footprint.
Figure 1
- Location map of
Neometals' Projects together with partner developments.
OPERATIONS
|
Lithium-ion Battery
Recycling
(Intellectual Property via ACN 630 589 507 Pty Ltd - NMT 50%,
SMS
50%)
(Plant construction via Primobius GmbH, NMT 50% SMS group GmbH
50%)
|
Primobius GmbH ("Primobius") is the incorporated
joint venture established in 2020 to commercialise Neometals
lithium-ion battery ("LiB") recycling technology ("LiB Recycling
Technology"). Primobius was granted
an exclusive licence from Neometals' LiB Recycling Technology
holding company, ACN 630 589 507 Pty Ltd ("ACN
630"), to supply LiB recycling
plants incorporating the patented flowsheet. Primobius will pay
royalties to ACN 630 where it operates as principal and will also
pass through royalties from plant supply and technology licensing
arrangements. ACN 630 is the ultimate beneficiary of 5 third party
technology licences issued to date. The structure is designed to
flow technology royalties and plant supply margins separately to
its co-owners.
Figure 2
- Technology royalty and
plant supply margins flow chart
Intellectual Property and Status
The LiB Recycling Technology
recovers materials contained in LiB production scrap and
end-of-life cells that might otherwise be disposed of in land fill.
Current LiB recycling processes predominantly rely on high carbon
emission pyrometallurgical processes. Primobius' two stage process
recovers nickel, cobalt, lithium and manganese battery materials
(and physically recovers metals and plastics) into saleable
products that can be reused in the LiB supply chain. The LiB
Recycling Technology prioritises maximum safety, environmental
sustainability, and product recoveries, to support the circular
economy and decarbonisation.
Figure 3
- High level flowsheet
showing the movement of materials from Shredding and
Beneficiation
('Spoke') through to
refining ('Hub') stages for the LiB Recycling
Technology.
During the quarter, ACN630 was
granted an additional national phase patent in Japan. Four patents
have now been granted with thirteen other national phase patents at
various stages of prosecution globally.
Commercialisation Status
Primobius' current business model
contemplates the following revenue sources:
1. Gate fees and product
sales from its LiB Disposal Operation in Hilchenbach;
2. Mechanical equipment
and plant supply agreements (Mercedes-Benz Plant); and
3. Royalties from sale
of products from future commercial plant supply agreements
(potential Stelco Inc Plant).
Hilchenbach Disposal
Operation
The Spoke section of the
demonstration plant in Hilchenbach Germany ("Hilchenbach Spoke") is providing
commercial LiB disposal services and the hydrometallurgical
refinery 'Hub' operates as a demonstration plant for discrete
customer trials and research and development.
The Hilchenbach Spoke produces
intermediate mixed nickel/cobalt product ("Black Mass"). The typical LiB contains
approximately 48% Black Mass which Primobius is recovering at high
levels and selling to a number of global offtakers on a spot basis
with pricing set according to nickel and cobalt content.
Mechanical Equipment and
Plant Supply
Primobius has a Cooperation
Agreement with Mercedes-Benz ("Mercedes") ("Mercedes Cooperation") for the
engineering, equipment supply and installation for a 2,500tpa fully
integrated, closed-loop recycling plant ("Mercedes Pilot Plant"). The Mercedes
Cooperation also outlines a 5-year research program, collaboration
and development of an industrial-scale solution for
Mercedes[1].
During the quarter, Primobius
continued the construction and commissioning activities at the
Mercedes Pilot Plant. Primobius was awarded
a purchase order (value ~ €18.8M (~ A$30.8M)) from Mercedes for the
supply of a hydrometallurgical refining Hub for installation at its
Kuppenheim Pilot Plant site in Germany. The purchase order covers
fabrication, installation and commissioning of the Hub which will
refine intermediate products from the 2,500tpa shredding 'Spoke'
(Spoke purchase order was awarded in August 2023).
Figure
4 - Mercedes-Benz LiB Recycling Buidling,
Kuppenheim Germany
|
Figure 5
- Part of the Integrated LiB Plant
installed by Primobius
|
Technology
Licensing
· Technology licensing and joint venture option agreements are
in place with a subsidiary of Stelco Inc. ("Stelco") ("Stelco Agreements"). Stelco plans to
secure large volumes of end-of-life vehicles in North America for
scrap steel and LiB recycling, with offer of maiden 21,000tpa
integrated plant ("Stelco
Spoke" followed by "Stelco
Hub") expected before 30 June 2025[2].
· Three
exclusive licences have been issued for Scandinavia, the Balkans
and Italy to third-party licensees and one non-exclusive licence to
the UK. Neometals is the largest individual shareholder in the
licensees and ACN630 is entitled to receive a 10% gross revenue
royalty from the technology licences.
Corporate
· Continued recruitment activities to expand the Primobius
technical, operational, commercial and management teams in line
with corporate milestones associated with offering mechanical plant
and equipment package supply contracts. In particular, Primobius is
expanding human capital in line with its commitments under the
Mercedes Cooperation where Primobius will support Mercedes with
commissioning, technical training, on site engineering support,
permitting and associated regulatory applications.
PRE-COMMERCIAL TECHNOLOGIES
|
Lithium
Chemicals
(Intellectual Property via Reed Advanced Materials Pty Ltd ("RAM")
- NMT 70%, Mineral Resources Ltd 30%)
|
RAM is the incorporated joint
venture to commercialise its proprietary process (ELi™ Processing Technology
("ELi™")) which can produce
lithium hydroxide and carbonate from lithium chloride
solutions using electrolysis. RAM has successfully converted lithium chloride
solutions from both natural spodumene and brine feedstocks into
battery quality lithium hydroxide at semi-pilot scale. ELi™ has the
flexibility to produce lithium hydroxide and lithium carbonate at a
significantly lower operating cost and carbon footprint compared to
conventional production processes. ELi's key economic advantage
lies in the potential to replace costly, imported bulk chemical
reagents with electricity and low-cost internally generated
reagents.
Figure 6 -
Schematic
showing a comparison of the conventional flowsheet for the
production of lithium hydroxide from brines with the patented Eli™
process.
Intellectual Property Status
During the quarter RAM was granted
an additional national phase patent in the USA. RAM now holds 20
granted patents in the hard rock and brine producing countries and
has a further 11 pending national phase patents at various stages
of prosecution globally.
Commercialisation Status
During the quarter, Neometals
advised that RAM has ceased discussions with Lifthium Energy SA
("Lifthium"), sister
company to leading Portuguese chlor-alkali producer, Bondalti
Chemicals SA ("Bondalti"),
in relation to co-funding the final stage of pilot test work
("Pilot") and constructing
a commercial demonstration plant.
RAM and Bondalti completed an
Engineering Cost Study ("ECS") for a 25,000tpa lithium hydroxide
monohydrate merchant refinery in Portugal and have been advancing a
phased Pilot test work program in Canada. The ECS confirmed the
technical feasibility of the process to purify and convert lithium
chloride to lithium hydroxide with potential lowest-quartile
operating costs and capital cost intensity. Additionally, the first
stage of the Pilot activities successfully purified lithium
chloride from an existing South American operation to the
specification required for conversion by electrolysis using
ELi™.
Despite the compelling operating /
capital cost metrics and successful purification Pilot activities,
RAM and Lifthium were unable to agree terms for further joint
evaluation activities and licensing arrangements. RAM is fully
funded to complete the final stage of Pilot test work and will
continue to test third-party brines for potential partners under a
low-capex, low-risk technology licensing business model to generate
future royalty income.
Technical
· Having
successfully completed the first 'purification' Pilot stage of
activities, RAM has been preparing for stages two ('electrolysis')
and three ("crystallisation') in what is a three-part test work
campaign. The electrolysis trials are now ready to commence with
crystallisation activities to follow using the output from
electrolysis.
Commercial
· Commercial discussions progressed with potential partners
under a low-capex, low-risk technology licensing business model to
generate future royalty income.
|
Vanadium
Recovery (Intellectual Property via
Avanti Materials Ltd - NMT 100%)
Vanadium Recovery Project 1 via Recycling Industries
Scandinavia AB ("RISAB") - 77% NMT
|
Neometals has developed a
sustainable, proprietary vanadium recovery process ("VRP Technology") to produce vanadium
products for battery and aerospace alloying applications from
stockpiles of vanadium-bearing steel making by-product. The unique
selling points of the VRP Technology are:
· A
processing flowsheet utilising conventional equipment at
atmospheric pressure, mild-temperatures, and non-exotic materials
of construction; and
· Potential lowest-quartile operating
costs[3] and
carbon-footprint from processing steelmaking slag by-product
eliminating the cost, risks and environmental impact of mined
upstream feedstocks.
Intellectual Property Status
Neometals' Vanadium Recovery IP
holding company, Avanti Materials Ltd, has eighteen pending
national phase patents for the VRP Technology across two patent
families with two at examination stage.
Commercialisation Status
Vanadium Recovery Project 1 ("VRP1") -
Finland
RISAB in an incorporated joint
venture which evaluated the feasibility of recovering high-purity
vanadium pentoxide ("V2O5") from high-grade vanadium-bearing
steel by-product ("Slag")
in Scandinavia. In March 2023, Neometals announced results of a
feasibility study that confirmed the
potential for lowest-quartile operating costs in a
high-purity vanadium chemical operation with a
low-to-negative carbon footprint4.
Despite having secured a conditional
binding Slag feedstock supply agreement with steelmaker SSAB,
take-or-pay offtake with Glencore International AG and debt
approved by the EIB, the vanadium price collapsed more than 50% in
2023 and equity financing could not be secured within the required
timelines. Accordingly, Neometals announced during the DecQ 2023
that it had advised its partner in the VRP1 project that it could
not commit to a positive final investment decision.
During the quarter, Neometals
assisted RISAB to explore value realisation options and advanced
discussions with potential licencees of the VRP Technology.
Subsequent to the end of the quarter, SSAB formally terminated the
Slag feedstock supply agreement and accordingly, all VRP1 project
activities will cease and RISAB will become dormant.
RESEARCH AND DEVELOPMENT
Precious Metals Recovery
In keeping with Neometals focus on
commercialising sustainable processing solutions that recycle and
recover critical materials from high-value waste streams, it has
commenced evaluating a third-party technology to recover previous
metals from industrial waste streams.
UPSTREAM MINING PROJECTS
|
Barrambie Titanium/Vanadium
Project (Neometals 100%)
|
Barrambie, located approximately
80km north-west of Sandstone in Western Australia ("WA"), is one of the largest
vanadiferous-titanomagnetite ("VTM") Mineral Resources globally
(280.1Mt at 9.18% TiO2 and 0.44%
V2O5), containing the world's second
highest-grade hard rock titanium Mineral Resource (53.6Mt at 21.17%
TiO2 and 0.63% V2O5) and
high-grade vanadium resource (64.9Mt at 0.82%
V2O5 and 16.9% TiO2) subsets
(referred to as the Eastern and Central Bands respectively) based
on the latest Neometals 2018 Mineral Resource
Estimate[4]. The
Mineral Resource is secured under a granted mining
lease.
Neometals secured environmental
approval in 2012 to mine and construct a 3.2 Mtpa processing plant
(Ministerial Statement 911), extended the timeframe for
implementation in 2019 (Ministerial Statement 1119) and is
currently in the process of securing a further extension of the
timeframe for project implementation. The project also has a
granted mining proposal to extract approximately 1.2Mtpa of
mineralisation.
Activity Summary
During the quarter the following
activities were undertaken:
Technical
· Tenement maintenance to keep Barrambie in 'good standing';
and
· Historical data collection and interpretation together with
geological model development for gold mineralisation. The Barrambie
Greenstone Belt hosts a number of historic gold mines and the town
was established upon the discovery of gold by contractors building
the rabbit-proof fence in 1905.
Corporate
Information memorandums and flyers
are being prepared for the divestment of the project.
|
Spargos Lithium
Project (Neometals 100%)
|
The Spargos Project ("Spargos"), located 50 kilometres southwest of
Coolgardie in WA, comprises a legacy mineral tenement that was
originally acquired for nickel prospectivity. Spargos is located in
an area of regional interest for nickel, lithium and
rare-earths.
Activity Summary
During the quarter the following
activities were undertaken:
Technical
· Re-sampling and assaying of pegmatites from historical nickel
exploration cores failed to return significantly anomalous results
to warrant further exploration; and
· External review concluded low potential for discovery of
lithium bearing pegmatites. Given the depressed market conditions
for both nickel and lithium, further exploration activities have
been placed on hold with the Company now focused on asset
divestment opportunities.
Corporate
· In
keeping with Neometals focus on commercialising sustainable
processing solutions that recycle and recover critical materials
from high-value waste streams, this non-core asset is being
prepared for divestment.
CORPORATE
During the quarter Neometals held
its annual strategic planning day and concluded to widen its focus
to capture critical materials as opposed to battery materials. The
existing incorporated joint-ventures holding the operating and
pre-commercial technologies will continue to prosecute low-cost,
plant supply and/or technology licensing business
models.
Neometals is delivering on a
significant austerity plan to reduce cash outflows which includes
reductions in staffing levels to reflect reduced levels of activity
in pre-commercial technologies, reduced directors' fees and a halt
on senior management short term incentives. Notably,
administration/overheads and exploration expenditure was reduced to
approximately $2.6 million compared with $4.3 million in the
December 2023 quarter and $6.6 million in the September 2023
quarter.
Neometals is actively looking to
rationalise its upstream mineral projects and generate
cashflow.
Financial
Finances (unaudited)
Cash and term deposits on hand as of
31 March 2024 totalled $14 million, including $0.4 million in
restricted use term deposits supporting contractual obligations.
The Company has investments totalling $15.3 million, net
receivables of $1.3 million and inventories of $0.7
million.
Related Party payments for the
quarter outlined in the ASX Appendix 5B released contemporaneously
at section 6.1 total $261,625 and are made up of Director fees and
superannuation.
Issued Capital
The total number of shares on issue
as at 31 March 2024 was 622,810,316.
Redivium Ltd (Formerly Hannans Limited) (ASX: RIL) (Redivium)
(Battery Recycling)
As at 31 March 2024 Neometals held
879,812,014 ordinary fully paid shares (~26% of the issued capital)
in Redivium on an undiluted basis. Redivium holds exclusive
technology licences to Neometals' original LiB Recycling Technology
in Italy, Greece and the Balkans, a non-exclusive licence in the
United Kingdom and it is earning a 50% interest in an exclusive
licence for Scandinavia held by Critical Metals Limited.
Critical Metals Limited (Unlisted, Scandinavian
Lithium/Cobalt/Base Metals)
Neometals holds ~18.4% of unlisted
public company Critical Metals Ltd, a company which holds an
exclusive licence to Neometals' original LiB Recycling Technology
in Scandinavia.
Authorised on behalf of Neometals by
Christopher Reed, Managing Director
For
more information, please contact:
Neometals Ltd
|
|
Chris Reed, Managing Director &
Chief Executive Officer
|
+61 8 9322 1182
|
Jeremy McManus, General Manager - IP
& IR
|
+61 8 9322 1182
|
Cavendish Capital Markets Limited - NOMAD &
Broker
|
|
Neil McDonald
|
+44 (0)131 220 9771
|
Peter Lynch
|
+44 (0)131 220 9772
|
Adam Rae
|
+44 (0)131 220 9778
|
Compliance Statement
The information in this report that
relates to Mineral Resource Estimates for the Barrambie
Vanadium/Titanium Project is extracted from the ASX Announcement
listed below, which is also available on the Company's website
at www.neometals.com.au
17/04/2018 Barrambie
- Updated Barrambie Mineral Resource Estimate
The Company confirms that it is not
aware of any new information or data that materially affects the
information included in the original market announcements and that
all material assumptions and technical parameters underpinning the
estimates in the market announcements continue to apply and have
not materially changed. The Company confirms that the form and
context in which the Competent Persons' findings are presented have
not been materially modified from the original market
announcements.
Appendix
Appendix 1: Global Resource
Table 1: Barrambie Mineral Resource Estimate, April
2018*
Appendix 2: Tenement
Interests
As at 31 March 2024, the Company has
an interest in the following projects and tenements in Western
Australia.
Project
Name
|
Licence
Name
|
Beneficial
Interest
|
Status
|
Barrambie
|
M57/173-I
|
100%
|
Live
|
Barrambie
|
E57/769-I
|
100%
|
Live
|
Barrambie
|
E57/770-I
|
100%
|
Live
|
Barrambie
|
E57/1041-I
|
100%
|
Live
|
Barrambie
|
E57/1220
|
100%
|
Pending
|
Barrambie
|
E57/1244
|
100%
|
Pending
|
Barrambie
|
E57/1245
|
100%
|
Pending
|
Barrambie
|
E57/1379
|
100%
|
Live
|
Barrambie
|
E57/1401
|
100%
|
Pending
|
Barrambie
|
E57/1437
|
100%
|
Pending
|
Barrambie
|
E20/1037
|
100%
|
Pending
|
Barrambie
|
L57/0030
|
100%
|
Live
|
Barrambie
|
L57/0064
|
100%
|
Pending
|
Barrambie
|
L57/0065
|
100%
|
Pending
|
Barrambie
|
L57/0066
|
100%
|
Pending
|
Barrambie
|
L20/0055
|
100%
|
Live
|
Barrambie
|
L20/0080
|
100%
|
Live
|
Barrambie
|
L20/0081
|
100%
|
Live
|
Queen Victoria
Rocks
|
E15/1416-I
|
100%
|
Live
|
Changes in interests in mining tenements Interests in mining
tenements acquired or increased
Project
Name
|
Licence
Name
|
Acquired or
increased
|
Barrambie
|
E57/1379
|
Application
|
Interests in mining tenements relinquished, reduced, or
lapsed
Project
Name
|
Licence
Name
|
Relinquished, reduced, or
lapsed
|
N/A
|
N/A
|
N/A
|
About Neometals
Neometals facilitates sustainable
critical material supply chains and reduces the environmental
burden of traditional mining in the global transition to a circular
economy.
The Company is commercialising a
portfolio of sustainable processing solutions that recycle and
recover critical materials from high-value waste
streams.
Neometals' core focus is on the
commercialisation of its patented, Lithium-ion Battery ("LiB") Recycling
technology (50% NMT), under a plant supply and technology
licensing business model. Primobius GmbH is the 50:50
incorporated JV with 150-year-old German plant builder, SMS group
GmbH, that is commercialising the technology. Primobius is building
a 2,500tpa recycling plant for Mercedes-Benz under a
long-term Cooperation Agreement. It also operates its own LiB
disposal service in Germany and plans to offer its first commercial
21,000tpa plant to North American licensee, Stelco, in JunQ
2025.
Neometals is also developing two
advanced battery materials technologies for commercialisation under
low-risk, low-capex technology licensing business
models:
· Lithium Chemicals (70% NMT)
- Patented ELi™ electrolysis
process, co-owned 30% by Mineral Resources Ltd, to produce battery
quality lithium hydroxide from brine and/or hard-rock feedstocks at
lowest quartile operating costs. Pilot scale test work and
Engineering Cost Study update planned for completion in DecQ 2024;
and
· Vanadium Recovery (100%
NMT) - Patent pending
hydrometallurgical process to produce high-purity vanadium
pentoxide from steelmaking by-product ("Slag") at lowest-quartile
operating cost and carbon footprint.
For further information
visit www.neometals.com.au