Neometals Ltd.: Robust Outcomes from Barrambie Titanium Project PFS
HIGHLIGHTS
- Neometals completes Class 4 Pre-Feasibility Study (“PFS”) for production of titanium (ilmenite) and iron-vanadium concentrate from titanium-rich Eastern bands at Barrambie;
- Results confirm viability of commercialising Barrambie with potential to supply in excess of 500,000 tpa of high-quality supply constrained ilmenite in the first 10 years of the project;
- Average free cash (before tax, depreciation and amortisation) of AUD $136M p.a. over the first 10 years;
- Probable Ore Reserve of 44.5 Mt at 18.7% TiO2, 44.1 % Fe2O3 and 0.61% V2O5;
- PFS assumes a simple mine, crush, mill and beneficiate operation to produce mixed gravity concentrate at Barrambie, followed by additional processing at a site with lower cost natural gas supply east of Geraldton; and
- The PFS confirms ‘value-in-use’ for Barrambie’s product basket and supports dialogue with potential offtake partner Jiuxing.
Figure 1 – Highlights of PFS
Emerging sustainable battery materials producer, Neometals Ltd (ASX: NMT & AIM: NMT) (“Neometals” or “the Company”), is pleased to announce the completion of an Association for the Advancement of Cost Engineering (“AACE”) Class 4 +/- 25% PFS for the production of ilmenite and an iron-vanadium concentrate from its 100% owned Barrambie Titanium Project (“Barrambie”). Following recent successful smelting trial results[1], the PFS has delivered compelling financial metrics and these recent confirmatory milestones will support final offtake dialogues which are underway.
The PFS used the Neometals 2018 Mineral Resource Estimate[2] as a basis to establish Ore Reserves, estimated using the guidelines of the 2012 edition of the Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (“JORC Code (2012)”). The Barrambie Mineral Resources reported are inclusive of Ore Reserves.
Neometals has invested in excess of $A40 million in the acquisition, exploration and evaluation of Barrambie since 2003. The Company has in more recent times maintained a primary focus on recovering a titanium product from Barrambie to realise maximum value for shareholders. The PFS assumes a mine, crush, mill and beneficiate (“CMB”) option at Barrambie on predominantly Eastern Band titanium-rich mineralisation to produce a mixed gravity concentrate (“MGC”) (Figure 2). MGC would then be subject to a low-temperature reduction roast (“LTR”) and magnetic separation at a second site alongside the Dampier to Bunbury Gas Pipeline (“DBNGP”) east of Geraldton to produce separate ilmenite and iron-vanadium concentrate streams (see Figure 3). Prior Neometals strategic evaluations assumed direct sale of MGC to potential off-takers however this PFS and the associated Ore Reserve estimates have been based on the LTR option. The LTR pathway can utilise readily available product market indices to provide a robust pricing basis for the PFS financials and will support final binding offtake dialogue.
Chris Reed, Neometals Managing Director said:
“These results highlight the robust potential economics for Barrambie’s development. The PFS financial metrics, alongside the recently announced positive commercial smelting results, underpin our ongoing discussions with potential offtake partner Jiuxing. Barrambie is a unique tier 1 project that offers a range of development alternatives including staged development with the possibility of direct shipping of ore, (“DSO”), beneficiation of ore into mixed gravity concentrate or further processing of MGC to produce separate ilmenite and vanadium rich iron products (the latter being the basis of the PFS). The potential to bring in excess of 500,000 tpa of high-quality ilmenite to the market has high strategic value.”
Figure 2 – 3D Representation of Barrambie CMB Site
Figure 3 – 3D Representation of Barrambie LTR Site near DBNGP
BACKGROUND
As previously announced1 a mixed gravity bulk sample from Barrambie mineralisation was successfully smelted at industrial scale with other commercially available titanium sources to produce +90% TiO2 chloride grade titanium slag (an intermediate product for production of pigment) with potential offtake partner Jiuxing Titanium Materials (Liaonging) Co. Ltd (“Jiuxing”). With the completion of the PFS estimate for Barrambie, negotiation on a binding formal offtake can now begin for cornerstone offtake with Jiuxing according to the Memorandum of Understanding (“Jiuxing MoU”) [3],[4] currently in place. Cornerstone offtake is a key pillar in Neometals’ Barrambie strategy of deriving value from the titanium, vanadium and iron Mineral Resource on a capital light basis.
The Jiuxing MoU contemplates a path to a formal offtake agreement where Neometals supplies a MGC or separate ilmenite and iron-vanadium concentrates from Barrambie to Jiuxing. Specifically, the MoU outlines an evaluation regime and contains the key commercial terms for a formal offtake agreement (i.e. pricing, volumes, price floor etc.), subject to product evaluation from smelting trials (now complete). The Jiuxing MoU contemplates the parties negotiating and entering into a binding formal offtake agreement for the supply of 800,000 dry tonnes per annum (“dtpa”) of MGC or 500,000 dtpa of ilmenite and 275,000 dtpa of iron-vanadium concentrate, on a take-or-pay basis for a period of 5 years from first production.
It is important to note that the PFS engineering capital and operating cost estimations have considered all aspects of the Barrambie value chain from a simple DSO option, a beneficiation option to make MGC, and an option to LTR the MGC and separate into ilmenite and iron-vanadium concentrate streams. Specifically, the PFS estimate has been structured to report on the operating and capital costs of the above start up scenarios which could be funded and brought into production on a staged basis. The negotiations with Jiuxing will consider all the start-up scenarios.
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Authorised for release on behalf of Neometals by Christopher Reed, Managing Director.
ENDS
For further information, please contact:
Chris Reed
Managing Director
Neometals Ltd
T: +61 8 9322 1182
Jeremy Mcmanus
General Manager - Commercial and IR
Neometals Ltd
T: +61 8 9322 1182
About Neometals Ltd
Neometals’ focus is the continuous development and innovative commercialisation of our proprietary technologies to achieve our Purpose in collaboration with strong global partners.
Neometals believes that the demand for environmentally and ethically sourced battery materials will continue to grow with energy storage being the key enabler for the energy transition. Decarbonisation, sustainability and resilient supply chains are the key challenges for the energy storage and electric vehicle supply chain. Our technologies, particularly those in battery materials recycling and recovery, reduce reliance on traditional mining and processing, and support circular economic principles.
Neometals have three core battery materials businesses commercialising proprietary, low-cost, low-carbon process technologies:
- Lithium-ion Battery Recycling (50% equity)– to produce nickel, cobalt and lithium from production scrap and end-of-life lithium-ion batteries in an incorporated JV with leading global plant builder SMS group. The Primobius JV is operating a commercial disposal service at its 10tpd plant in Germany and is the recycling technology partner to Mercedez-Benz. Primobious’ first 50tpd operation will be in Canada, an investment decision to partner with Stelco is expected to reach investment decision in MarQ 2023;
- Vanadium Recovery (earning 50% equity) – to produce high-purity vanadium pentoxide via processing of steelmaking by-product (“Slag”). Finalising evaluation studies on a 300,000tpa operation in Pori, Finland and potential joint venture with Critical Metals, underpinned by a 2Mt, 10-year Slag supply agreement with leading Scandinavian steelmaker SSAB. Investment decision expected end Dec 2022. MOU with H2Green Steel for up to 4Mt of Slag underpins a potential second, operation in Boden, Sweden; and
- Lithium Chemicals (earning 35% equity)– to produce lithium hydroxide from brine and/or hard rock feedstocks using our ELi® electrolysis process. Co-funding pilot plant and evaluation studies on a 25,000tpa operation in Estrarreja, Portugal towards a potential JV with technology co-owner Mineral Resources Ltd and Portugal’s largest chemical producer Bondalti Chemicals S.A. Investment decision expected Dec 2023.
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[1] For further details see Neometals announcement titled “Successful Commercial-Scale Smelting Trials for Barrambie” dated 2nd November 2022.
[2] For further details see Neometals announcement titled “Updated Barrambie Mineral Resource Estimate” dated 17th April 2018.
[3] For further details see Neometals announcement titled “Barrambie - MOU for Cornerstone Concentrate Offtake” (“Jiuxing MoU”) dated 16th April 2021.
[4] For further details see Neometals announcement titled “Barrambie Pilot Plant and Offtake update” dated 23rd December 2021.
