THE BOURSE WHISPERER: Neometals (ASX: NMT) Mineral Resources (ASX: MIN), via the latter’s wholly-owned subsidiary, Process Minerals International, announced the start of the construction phase of the Mt Marion lithium project following the Final Investment Decision.
The companies announced that first production from Mt Marion is expected by mid-2016.
The Mt Marion project is designed to produce more than 200,000 tonnes per annum of chemical grade spodumene concentrate.
Neometals and MIN explained that a financial close had been reached regarding formal agreements the two entities had executed with China’s second largest lithium producer, Jiangxi Ganfeng Lithium Co., Ltd (Ganfeng), in respect of that company’s equity investment in the Mount Marion lithium project.
As a result of a Share Sale, Subscription and Option Agreement, the parties have entered into a Shareholders Agreement to govern their investments in Reed Industrial Minerals Pty Ltd (RIM), which is the owner of the project.
RIM has also entered into a life-of-mine Offtake Agreement with Ganfeng, and a Mining Services Agreement with MIN for the construction and operation of the project on a Build-Own-Operate basis.
The completion of these agreements constitutes the Final Investment Decision.
Neometals has received a net amount of US$19.75 million from Ganfeng in respect to the equity investment in RIM.
“This heralds a new chapter for Neometals as we move into the construction phase of Mt Marion,” Neometals managing director Chris Reed said in the company’s announcement to the Australian Securities Exchange.
“We have successfully executed our strategy to bring Mt Marion to fruition teaming with a partner who provides expertise in construction and processing as well as securing a valuable offtake partner.”