Neometals MD Chris Reed
JOHANNESBURG (miningweekly.com) – Construction has started at the Mt Marion lithium project, in Western Australia, with first production expected in mid-2016.
The project would deliver about 200 000 t/y of chemical grade spodumene concentrate.
ASX-listed Neometals and fellow listed Mineral Resources (MIN), through its wholly owned subsidiary Process Minerals International (PMI) said on Monday that this followed the financial close of formal agreements with China’s second-largest lithium producer Jiangxi Ganfeng Lithium.
Under the terms of a share sale, subscription and option agreement, the parties had entered into a shareholders agreement to govern their investments in Reed Industrial Minerals (RIM) – the owner of the Mt Marion project.
Neometals now held 45% of the project, PMI 30% and Ganfeng 25%.
In accordance with the deal, Neometals had received $19.75-million from Ganfeng as payment for its equity investment in RIM.
RIM had further entered into a life-of-mine offtake agreement with Ganfeng that would see the Chinese firm buying all of the project’s spodumene production for the life-of-mine at market prices on a cost, insurance and freight basis, subject to an agreed floor.
A second deal saw RIM ink a mining services agreement with MIN for the construction and operation of the project on a build-own-operate basis.
“This heralds a new chapter for Neometals as we move into the construction phase of Mt Marion. We have successfully executed our strategy to bring Mt Marion to fruition, teaming up with a partner who provides expertise in construction and processing, as well as securing a valuable offtake partner,” commented Neometals MD Chris Reed.