About Neometals

Neometals’ focus is the continuous development and commercialisation of their proprietary innovative technologies with strong global partners to generate value through sustainable production of battery materials.

Decarbonisation, sustainability and resilient supply chains are the key challenges for the energy storage and electric vehicle supply chain. Neometals’ technologies, particularly those in battery materials recycling and recovery, reduce reliance on traditional mining and processing, and support circular economic principles.

Neometals has three core battery materials businesses commercialising proprietary, low-cost, low-carbon process technologies:

  • Lithium-ion Battery (“LIB”) Recycling (50% equity) – to produce nickel, cobalt and lithium from production scrap and end-of-life LIBs in an incorporated joint venture (“JV”) with leading global plant builder SMS group. The Primobius JV is operating a commercial disposal service at its 10 tonne per day Shredding ‘Spoke’ in Germany and is the recycling technology partner to Mercedes Benz. Primobius’ first 50 tonne per day operation will be in partnership with Stelco in Canada and is expected to reach an investment decision in Dec 2022;
  • Vanadium Recovery (earning 50% equity) – to produce high-purity vanadium pentoxide via processing of steelmaking by-product (“Slag”). The Company is finalising evaluation studies on a 300,000 tonne per annum operation in Pori, Finland, and a potential JV with Critical Metals, underpinned by a 2 million tonne, 10-year Slag supply agreement (together with potential availability of a further 1.1 million tonne) with leading Scandinavian steelmaker SSAB. Investment decision expected at the end of Dec 2022. A memorandum of understanding (MOU) with H2Green Steel for up to 4 million tonne of Slag underpins a potential second operation in Boden, Sweden; and
  • Lithium Chemicals (earning 35% equity) – to produce battery-quality lithium hydroxide from brine and/or hard-rock feedstocks using RAM’s patented ELi® electrolysis process. The Company is co-funding a pilot plant and evaluation studies on a 20,000 tonne per annum operation in Estarreja, Portugal in a 50:50 JV between RAM (70% NMT, 30% Mineral Resources Ltd) and Portugal’s largest chemical producer Bondalti Chemicals S.A. Investment decision expected Dec 2023.

Summary

Neometals is a sustainable emerging producer of battery materials. The Company targets feedstocks from already mined materials to apply proprietary green processing technologies for recycling, recovery and downstream value adding. Neometals’ technologies are spawning multiple projects which all support a central theme of decarbonisation, circular economies and energy transition.

Neometals is headquartered in Perth, Western Australia, its initial project footprint will be in Europe and North America, and it holds a primary ASX and secondary AIM stock exchange listings. The Company came from mining roots and project execution success at its Mt Marion lithium mine has bolstered the balance sheet to pursue its growth ambitions. Further, Neometals has generated a track record of delivering shareholder returns with approximately $A80m distributed back to investors in the last 5 years.

Neometals’ focus is no longer upstream mining but rather the commercialisation of three proprietary green technologies with strong global partners. The Company currently has small commercial recycling operations in Germany, partners co-funding every business unit and looming investment decisions across maturing opportunities in its portfolio.

Thesis

Neometals has pivoted away from reliance on upstream mining with the Company transitioned to generating value through the sustainable production of battery materials, sans mining.

The strength of the Company’s business case for success is supported by:

  • A diversified ESG-aligned battery materials portfolio. Neometals has three maturing business units with the flagship battery recycling project operating commercially. All opportunities support decarbonisation and direct face the EV / energy storage megatrend;
  • The Company has a track record of project execution success and experience working with global partners to fast-track outcomes and build/operate at a scale that is not dictated to by capital;
  • A clear strategy with a proven, replicable and sustainable ‘project development’ model. The business model focuses on identifying opportunities, applying innovation to integrate down the value chain and partnering to de-risk. This model, proven at Mt Marion, can be replicated across the Company’s other growth projects; and
  • Key projects leveraging strong innovation expertise being co-funded with leading global partners. Neometals has a long history of R&D and successful development has drawn significant commercial and delivery partners to de-risk commercialisation includes, but not limited to validation from, SMS group, Bondalti, Mercedes, Stelco, and Itochu. Key technologies are either patented or patent pending.

The Neometals shareholder value proposition is supported by:

  • Track record of shareholder returns. Aligned management team and Board with experience identifying early-stage opportunities, de-risking via partnerships and diversification, R&D and delivering project outcomes which have resulted in returns. Specifically, A$82M in dividends / buyback / return of capital in the last 5 years;
  • Strong balance sheet to fund developments. At present Neometals has approximately $A60m, $A30m of investments and no debt. With a partner co-funding model borne in mind, it is in a strong position to finance projects to final investment decision (FID); and
  • Strong Growth Potential. Across the Company’s three core projects it is exposed to a basket of the key critical battery materials which are all forecast to be significantly supply constrained. Each business unit is underpinned by a technology that is spawning multiple projects. The largest growth is seen in the global rollout of the battery recycling technology, followed by vanadium recovery and the lithium chemical business. In addition, the Company has a ‘shovel ready’ legacy upstream asset that is likely to be divested.

Funding and near-term catalysts

As of the end of the June 22 quarter, Neometals had ~$A60m of cash and $A30m of liquid investments. Across the three core projects, there are a suite of upcoming catalysts with all eyes on the pending battery recycling refinery ‘Hub’ cost study and plant purchase orders from Mercedes and Stelco which are anticipated by year's end.

The Company is well funded in the short term and a purchase order from Canadian company Stelco will trigger a 1-month option exercise window where Primobius (Neometals 50:50 recycling JV) can elect to buy up to 50% of Stelco’s special purpose battery recycling entity which presently has a licence over the recycling technology.

In addition to the Lithium-ion Battery Recycling business catalysts, Neometals is working towards electrolysis trials with Portuguese chemical major, Bondalti ahead of feasibility outcomes and a Bondalti JV investment decision (Lithium Chemicals business).

The Vanadium Recovery business awaits an updated ‘slag’ offtake agreement with steel maker SSAB, feasibility results and its investment decision to JV with Critical Metals regarding Finnish vanadium chemical production. Finally, Neometals’ legacy upstream asset, Barrambie, will have results from Chinese smelting trials to hand as it looks to finalise binding offtake arrangements for the titanium-rich concentrates it aims to produce.

ESG

Sustainability is not an aspiration for Neometals but rather it's core business. Rather than just generating materials that make their way into ‘green’ products, Neometals has also developed the underlying processes that support decarbonisation and the energy transition.

Generation of the materials provides an additional benefit. Unlike existing operations with carbon-intensive business units, Neometals has no carbon sins to atone and the drivers for development relate to the circular economy, raw material resilience, stakeholder expectations, safety, value in waste and cost reduction.

The Company has just lodged its third sustainability report which outlines progress against targets and future goals and remains committed to improving year on year. The Company looks to design, plan, and give effect to projects that extract the maximum value from limited resources as efficiently as possible with minimal waste.

Risks

Like most listed market participants, there are a range of threats to the business that can’t be directly controlled. These include things like dysfunction in the global economy and capital markets, climate change and access to capital. More specific to Neometals, with diversification comes a requirement for increased human resources to manage projects, managing partners offshore and technical or economic failure of one of the projects.

It should be borne in mind that the Company only has small revenue via a joint venture at present however its growth plans are significant and the Company has experience in bringing partnered projects to commercial fruition with all the associated risk mitigation rigour that is required.

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