THE BOURSE WHISPERER: Neometals (ASX: NMT) announced an expansion to the lithium offtake agreements in place at the company’s Mt Marion project in Western Australia.
The company, along with Mineral Resources (ASX: MIN) referred to their announcement dated 28 September 2015 regarding financial close of the Mt Marion project Offtake and Equity Investment with Chinese lithium producer, Ganfeng Lithium Co., Ltd.
“Under the initial offtake arrangements between Ganfeng and the project vehicle, Reed Industrial Minerals Pty Ltd (RIM), Ganfeng agreed to take-or-pay 100 per cent of the six per cent lithium oxide (Li2O), chemical grade spodumene concentrate produced from the Mt Marion project,” Neometals explained in its ASX announcement.
Recent metallurgical test work has identified an additional spodumene product can be generated through the addition of a flotation circuit to the current beneficiation plant.
As a results Neometals and MIN have eached an agreement with Ganfeng agreed to expand the scope of the offtake arrangements to take-or-pay an additional 80,000 tonees per annum of spodumene concentrate of between four and six per cent Li2O content, generated by flotation at agreed discounts to the market prices for the six per cent Li2O product.
“The expansion remains conditional on RIM and MIN (via its wholly owned subsidiary, Process Minerals International Pty Ltd) agreeing and finalising the necessary variations to the Mining Services Agreement to cover the production of the lower grade product, which will include the addition of a flotation plant at the Mt Marion project,” Neometals said.
“The variation will be concluded on completion of a detailed metallurgical test program currently being undertaken.”