PERTH (miningweekly.com) – The board of ASX-listed Neometals has approved the demerger of the Barrambie titanium/vanadium project, in Western Australia, along with the associated technology assets, into a newly listed company.

Neometals told shareholders on Thursday that the move would allow the company and the newly listed entity to separately focus on the development of their respective integrated lithium and titanium/vanadium strategies.

Both companies will be targeting the conversion of captive resources into long-life, higher margin operations through vertical integration and innovative cost advantages through process technology.

“The company ahs reached an inflection point where both business arms need dedicated management, independent corporate structures and financial resources to realise optimal value,” said Neometals MD Christopher Reed.

“Neometals has an enviable lithium portfolio and a disciplined strategy to maximise risk and maximise returns from its lithium feedstocks. We understand the incredible potential of Barrambie, and with the application of the same staged development strategy we have used in the lithium business, we have every confidence it will become a globally significant operation.”

Neometals last year announced plans to fast-track the start-up of the Barrambie project as a direct shipping ore (DSO) operation, and has lodged a draft mining proposal for a small operation to extract some 50 000 t of ore.

The DSO will be toll beneficiated and smelterd in China as part of a Phase 1 opration, with a subsequent Phase 2 development using on-site processing options, which is currently being investigated.

In addition to developing Barrambie, the new company will also be responsible for advancing the development of a range of mineral processing technologies which can be used as on-site processing options for Barrambie, as well as being capable of treating a range of different feed materials.

Neometals is currently preparing to complete a pilot programme in the first half of 2019, using its most advanced hydrometallurgical processes.

If the demerger is implemented, Neometals shareholders will receive shares in the new company proportional to their existing Neometnals holdings.

The demerger will be subject to final board approvals, third party concentors and regulatory and shareholder approvals. If approved, the demerger will be completed in the March quarter of next year, after which the new company will seek a listing on the ASX.

Following the demerger, Neometals will maintain its strategic 13.8% stake in the Mt Marion lithium operation, in Western Australia.

The company is currenlty progressing the evaluation of the deveopment of the Kalgoorlie lithium refinery project, to downstream process its spodumene offtake rights from Mt Marion into high-purity lithium hydroxide. The front-end engineering and design, and feasibility studies are on track for completion by the end of the financial year, and subject to financing, a final investment decision is expected in mid-2019.