REG - Neometals Ltd - Neometals Strategy Update

NeometalsAnnouncement

22/08/2024 07:01

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RNS Number : 4023B  Neometals Ltd  22 August 2024

This announcement contains inside information

 

22 August 2024

Neometals Ltd

("Neometals" or "the Company")

Neometals Strategy Update

Sustainable process technology developer, Neometals Ltd (ASX: NMT, AIM: NMT
& OTCQX: NMTAY) ("Neometals" or "the Company"), provides a strategy update
with the following key measures to be implemented immediately:

·      Restructuring and right-sizing of the organisation and its
underlying cost base to reflect a new strategic refocus;

·      Prioritising the progression of Primobius, the LiB Recycling
joint venture with SMS group GmbH, through industrial validation to
commercialisation; and

·      Capital management initiatives through the targeted sale of
non-core assets and strategic partnering to facilitate the ongoing development
of the Company's other technologies.

Neometals has adapted its corporate strategy in response to prevailing battery
materials prices and market sentiment. A simplified structure and focus on the
Primobius plant building joint venture targets an optimum path to creating and
realising shareholder value.

These steps and the Company's existing austerity plan are expected to lower
the corporate and administrative cost base by approximately 40% year-on-year.
This, coupled with the recently announced placement raising approximately
A$4.5M,(( 1  (#_ftn1) )) is intended to support the commercialisation of
Primobius with the aim of becoming a leading supplier of LiB Recycling plants
to the global EV supply chain.

Primobius' patented recycling process is being industrially validated through
the delivery of a 2,500 tpa plant for Mercedes-Benz in Kuppenheim, Germany.
Once successfully commissioned and accepted by the client, Primobius plans to
then offer larger plants to its growing pipeline of licence holders, MOU
counterparties and new customers.  Primobius' preferred business model is to
offer plant supply contracts and technology licences, rather than operating
recycling plants as principal.

The pre-commercial lithium and vanadium recovery technologies have been
developed to pilot scale but require significant additional capital to
demonstrate proof-at-scale. Despite the prolonged lithium and vanadium
commodity price downturns, the engineering cost studies indicate both
technologies can potentially deliver users a step change in operating costs
and carbon footprints of materials, critical for the long-term energy
transition. Neometals is actively supporting these distinct business units to
become independently funded and will consider options to potentially sell down
beneficial ownership, by procuring commercial partners for those business
units.

Neometals Managing Director Chris Reed said:

"We have taken these tough but necessary decisions to simplify our strategy,
focus and organisation to prioritise the growth of the Primobius revenue base
and forward order book. Primobius is a market leader, delivering a
first-of-a-kind integrated recycling plant for Mercedes-Benz, a global marquee
carmaker. The headwinds in the battery materials sector dictate that we must
adapt to suit conditions by conserving capital, securing partners to fund our
pre-commercial technologies and divesting non-core assets".

Updates have been provided below in alignment with the Company's corporate
strategic pillars. These pillars represent Neometals' key areas of focus:

Capital

In addition to the recent injection of capital, Neometals will continue and
intensify its austerity plan to further reduce cash outflows and extend its
capital horizon. The board will allow the option to acquire a precious metal
recovery process and plant in the US to lapse.(2) As at 21 August 2024,
Neometals has approximately $9.3M in cash and no debt.

People

The necessary restructure to match the scope and scale of the new strategy
unfortunately impacts a number of roles within the organisation which have
been made redundant. The individuals affected have been notified and Neometals
is supporting them as it works through the required processes. The LiB
Recycling team, headed by Jenny Purdie (COO), retains its capacity to deliver
the work packages managed by Neometals on behalf of Primobius.

Product Readiness

Primobius' commercial scale recycling plants (~20,000 tpa) are the closest
"Product" to being commercially ready for sale within Neometals' portfolio,
under plant supply and technology licensing business models. A precondition to
"Product Readiness" is the successful commissioning and acceptance of the
2,500 tpa Mercedes Pilot Plant. The acceptance testing for the shredding and
beneficiation section of the Mercedes Pilot Plant ("Spoke") is currently
expected in the 1H CY25 and the refinery section ("Hub") in the 2H CY2025,
with other commercial milestones aligned accordingly.(3( 2  (#_ftn2) ))

Partners

Neometals' key partner is SMS group GmbH, the 50% co-owner of Primobius.
Neometals' partner in its lithium processing technology ("ELi™") is Mineral
Resources Ltd (30%).

Neometals will focus on securing additional partners to fund the further
development of its other pre-commercial technologies through the
demonstration, industrial validation and commercial stages.

Portfolio

Neometals is focused on reshaping its portfolio of assets to become less
complex and more easily understood and is prioritising the delivery of its
highest-value, near-term growth opportunities. This includes the planned
divestment of its upstream mining assets with the freed capital available to
support its priority projects. The Company remains committed to its core
competency of developing processes for the recovery of critical materials from
high-value waste streams through urban mining.

All intellectual property is held in special purpose vehicles separate from
their commercialisation vehicles. The commercialisation vehicles hold
technology licences and they aim to prosecute business models ranging from
plant supply to principal operations. Primobius has a low-capital plant supply
and low-risk licensing business model and is core to Neometals' portfolio.

For more detailed information please refer to the updated presentation
available at: https://www.neometals.com.au/en/investors/presentations/
(https://www.neometals.com.au/en/investors/presentations/)

Authorised by the Board of Neometals

 

- ENDS -

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 Ltd - NOMAD & Broker
 Neil McDonald                                                +44 (0)131 220 9771
 Peter Lynch                                                  +44 (0)131 220 9772
 Adam Rae                                                     +44 (0)131 220 9778

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 its patented, Lithium-ion Battery
("LiB") Recycling technology (50% NMT), being commercialised in a 50:50
incorporated JV (Primobius GmbH) with 150-year-old German plant builder, SMS
group GmbH. Primobius is supplying Mercedes-Benz a 2,500tpa recycling plant
and operates its own LiB Disposal Service in Germany. Primobius' first
21,000tpa commercial plant will be offered to Stelco under an existing
technology licence for North America.

Neometals is 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
(https://www.neometals.com.au/) .

 1  (#_ftnref1) For further details, refer to Neometals ASX announcement
headlined "US$3M Placement", released 19(th) August 2024.

(#_ftnref2) 2 For further details, refer to Neometals ASX announcement
headlined "Option to Acquire Precious Metals Waste Recovery Process and Plant
in US", released 27(th) May 2024.

(3) For further details, refer to the presentation that follows at the end of
this announcement.

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