REG - Neometals Ltd - Quarterly Activities Report

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24/04/2024 07:00

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RNS Number : 8363L  Neometals Ltd  24 April 2024

 

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 ("V(2)O(5)") 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 footprint(4).

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% TiO(2) and 0.44% V(2)O(5)),
containing the world's second highest-grade hard rock titanium Mineral
Resource (53.6Mt at 21.17% TiO(2) and 0.63% V(2)O(5)) and high-grade vanadium
resource (64.9Mt at 0.82% V(2)O(5) and 16.9% TiO(2)) 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 (http://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
(http://www.neometals.com.au/)

 

 

 1  (for full details refer to Neometals ASX announcement headlined
"Cooperation Agreement with Mercedes Benz" released on 13(th) May 2022)

 2  (for full details refer to Neometals ASX announcement headlined "Primobius
Commercial Update" released on 22nd December 2023)

 3  (for full details refer to Neometals ASX announcement headlined "Vanadium
Recovery Project Delivers Strong Feasibility Results" released on 8(th) March
2023).

 4  (for full details refer to ASX announcement headlined "Barrambie Project -
Mineral Resource Update
(https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2995-01971759-6A879871?access_token=83ff96335c2d45a094df02a206a39ff4)
" released on 17 April 2018 and Table 1 (Appendix 1)

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