Neometals: Quarterly Activities Report - For the quarter ended 30 June 2022
HIGHLIGHTS
CORPORATE
- Cash balance A$60.4 million, receivables and investments of A$32.1 million and no debt; and
- Multiple on-market share purchases by Company Directors and Officers during the quarter.
CORE BATTERY MATERIALS BUSINESS UNITS
Lithium-ion Battery (“LIB”) Recycling Project (50% NMT via Primobius GmbH, an incorporated JV with SMS group GmbH)
- Commenced operations at the commercial 10 tonnes per day (tpd) shredding and beneficiation (“Spoke”) plant in Hilchenbach, Germany, following receipt of operating permit. Cornerstone LIB feedstock supply and intermediate ‘black mass’ product off-take agreements secured;
- Cooperation agreement signed with Mercedes-Benz recycling subsidiary for the engineering, equipment supply and installation of a 10tpd Spoke and hydrometallurgical refinery (“Hub”) plant in Kuppenheim, Germany. First purchase order for engineering received post quarter end and agreement now legally binding;
- First stage front-end engineering studies completed for the Stelco 50tpd Spoke plant in Hamilton Canada under a technology licensing and JV ‘buy-in’ option agreement; and
- Appointment, post quarter end, Merrill Gray, as Head of Recycling.
Vanadium Recovery Project (“VRP”) (earning into 50:50 JV with Critical Metals Ltd)
- Potential for lowest quartile operating costs confirmed via AACE®[i] Class 3 Engineering and Cost Study (“ECS”) announced post the quarter end;
- Feasibility study, including ECS findings, is being advanced in parallel with negotiations for additional slag volumes from Swedish Steel AB (“SSAB”); and
- Offtake, financing and permitting activities advanced during the quarter with a decision on the environmental permit expected from Finnish regulators in September 2022.
Lithium Chemicals Project (earning into 50:50 JV with Bondalti Chemicals SA via Reed Advanced Materials Pty Ltd (“RAM”) (NMT 70:30 Mineral Resources Ltd)
- Commenced AACE® Class 3 ECS for ~20,000tpa lithium hydroxide production using RAM’s ELi® Process at Bondalti’s Estarreja chlor-alkali operation in Portugal. Scheduled for completion in the DecQ 2022;
- Commenced engineering activities for proposed Pilot Plant to be located at Estarreja. Equipment supply contract to be awarded in SepQ 2022 with installation and commissioning expected in the MarQ 2023; and
- Multiple feedstock sourcing negotiations (lithium brine and spodumene concentrates) in progress to secure material for test work trials (bench and pilot).
UPSTREAM – MINERAL EXTRACTION
Barrambie Titanium and Vanadium Project (“Barrambie”) (100% NMT)
- 40 tonne sample of mixed gravity concentrate arrived at Jiuxing ahead of commercial smelting trials planned to commence in July 2022; and
- AACE® Class 4 pre-feasibility study advanced with completion expected in DecQ 2022.
COMPANY OVERVIEW
Neometals’ focus is the continuous development and commercialisation of our proprietary innovative technologies with strong global partners to generate value through sustainable production of battery materials.
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 has three core battery materials businesses commercialising proprietary, low-cost, low-carbon process technologies:
Lithium-ion Battery (“LIB”) Recycling (50% equity)– to produce nickel, cobalt and lithium from production scrap and end-of-life LIBs in an incorporated JV with leading global plant builder SMS group. The Primobius JV is operating a commercial disposal service at its 10tpd Shredding ‘Spoke’ in Germany and is the recycling technology partner to Mercedes Benz. Primobius’ first 50tpd operation will be in partnership with Stelco in Canada is expected to reach investment decision in Dec 2022; 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 a potential JV with Critical Metals, underpinned by a 2Mt, 10-year Slag supply agreement (together with potential availability of a further 1.1Mt) 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 battery quality lithium hydroxide from brine and/or hard-rock feedstocks using RAM’s patented ELi® electrolysis process. Co-funding pilot plant and evaluation studies on a 20,000tpa operation in Estarreja, Portugal in a 50:50 JV between RAM (70% NMT, 30% Mineral Resources Ltd) and Portugal’s largest chemical producer Bondalti Chemicals S.A. Investment decision expected Dec 2023.
Figure 1 – Location map of Neometals’ Core Projects together with partner developments
CORE BATTERY MATERIALS BUSINESS UNITS
Lithium Battery Recycling Project
Neometals 50% via Primobius GmbH, a 50:50 incorporated JV with SMS group GmbH
(NMT 100% Intellectual Property ownership, SMS earning 50%)
Primobius is commercialising a sustainable, proprietary, LIB recycling process, originally developed by Neometals. The process 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 emission pyrometallurgy. Primobius’ two stage, Spoke and Hub, process flowsheet (“LIB Recycling Technology”) is designed for sustainable recovery of nickel, cobalt, lithium, copper, manganese and carbon (amongst other) into saleable products that can be reused in the LIB supply chain.
The LIB Recycling Technology process prioritises maximum safety, environmental sustainability and product recoveries, to support the circular economy and decarbonisation.
A pilot trial (“Pilot”) at SGS Lakefield, Canada in 2019/20 successfully produced cathode-grade nickel and cobalt sulphate products which collectively represent approximately 80% of the value of the basket of products recovered. Demonstration trials in Hilchenbach, Germany have been conducted with the Spoke currently being commercially ramped up for disposal facility operations with up to 10tpd LIB feedstock capacity. Data generated during ongoing Hub trials is being used as the basis in ongoing process and product development.
Figure 2 - High level flowsheet showing the movement of materials from Shredding and Beneficiation through to Refining stages for the LIB Recycling Technology
The LIB Recycling Technology, comprises two stages:
Spoke - LIB receipting, sorting, discharging, disassembly together with shredding and beneficiation to physically separate all of the components of LIBs received, by metal casings, electrode foils, plastics and active materials; and Hub - Leaching, purification and crystallisation of the active materials to produce refined chemical products suitable for use in production of LIB precursor, via a hydrometallurgical processing facility.
Primobius GmbH, incorporated JV with SMS
Neometals entered into an incorporated 50:50 joint venture (“JV”) with SMS group GmbH (“SMS group”), called Primobius GmbH (“Primobius”) in 2020. Primobius was incorporated to co-fund and complete the commercialisation of the LiB Recycling Technology.
Neometals will contribute its recycling technology as well as its share of Primobius funding required under the various business models targeted i.e. JV partnership, provision of recycling services and technology licensing. SMS group will co-contribute funds equally and will perform the engineering design and cost studies for Primobius. SMS has the right of first offer to provide engineering, procurement and construction services for each recycling plant Primobius undertakes. On a best endeavours basis, SMS will also procure debt financing for no less than 50% of the capital expenditure on projects (for full details refer to Neometals ASX announcement entitled “Neometals and SMS create Lithium Battery Recycling JV” released on 3rd August 2020).
Project Activities
During the quarter, Primobius further progressed technical and commercial work across the business. The quarter also marked the commencement of commercial disposal operations at Hilchenbach, Germany.
Demonstration Plant (“DP”)
The Hilchenbach DP Spoke is now being operated as a commercial LIB disposal facility with a permit secured to process up to 10tpd (“Hilchenbach 10tpd Spoke”). The hydrometallurgical refining Hub at Hilchenbach continues as a test circuit for product evaluation and Primobius flowsheet optimisation. DP trials have been completed on the Spoke with data generated feeding into evaluation studies (“Spoke ECS”) that will inform the JV shareholders investment decisions on in Primobius’ first, large scale recycling plant, with a throughput capacity at 50tpd (~20ktpa) as part of the Stelco agreement (for full details refer to Neometals ASX announcement entitled “Li Battery Recycling - MOU with Stelco for North America” released on 27th May 2021).
The entire press release can be found under the following link: https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02547646-6A1102198?access_token=83ff96335c2d45a094df02a206a39ff4
Financial
Hannans Limited (ASX:HNR) (Hannans) (Yilgarn Nickel/Lithium/Gold/Battery Recycling)
As at 30 June 2022 Neometals held 845,086,264 ordinary fully paid shares (~32.4% of the issued capital) in Hannans on an undiluted basis. At 30 June 2022, Hannans’ shares closed at 2.1c implying a value of $17.7 million.
Critical Metals Limited (Unlisted, Scandinavian Lithium/Cobalt/Base Metals)
Neometals holds 19% of unlisted public company Critical Metals Ltd, a company which now houses the Scandinavian mineral assets previously held by Hannans and is collaborating with Neometals on Scandinavian LIB recycling and vanadium recovery opportunities.
Other Investments
The market value of the Company’s other investments as at 30 June 2022 totalled $10.5 million.
Finances (unaudited)
Cash and term deposits on hand as of 30 June 2022 totalled A$60.4 million, including $0.2 million in restricted use term deposits supporting contractual obligations. The Company has net receivables and investments totalling approximately $32.1 million.
Related Party payments for the quarter outlined in the ASX Appendix 5B released contemporaneously at section 6.1 total $229,750 and are made up of Director fees and superannuation.
Issued Capital
The total number of shares on issue at 30 June 2022 was 548,376,396.
Authorised 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
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 form the original market announcements.
[i] Association for the Advancement of Cost Engineering (AACE®)