Neometals (NMT) - 30% Gains for Early Mover Battery Recycler

Neometals is a mineral and advanced material company involved in the recycling, and production of high-grade lithium and vanadium. The company was founded in 2001 and is headquartered in Australia. Alphamet Management Pty. Ltd, Mount Finnerty Pty. Ltd., Reed Advanced Material Pty. Ltd., Mt. Edwards Lithium Pty. Ltd., Barrambie Gas Pty Ltd., and Innovation Pty. Ltd (formerly Australian Vanadium Exploration Pty. Ltd.), are the companies' subsidiaries.

We met with Christopher Reed and Jeremy McManus. 

Christopher is the CEO and Managing Director of Neometals. He started his career in the mining industry in 1990 and co-founded Reed Resources in 2001. He is a member of the AusIMM (Australasian Institute of Mining and Metallurgy) and former Vice President of the Association of Mining & Exploration Companies. His educational background includes a Bachelor of Commerce degree from the University of Notre Dame, WA School of Mines. 

Jeremy is the General Manager of Commercial and Investor Relations at Neometals. He has over 2 decades of experience in the resources and technology materials sector. He previously served as a Commercial Manager for Talga Resource along with various corporate finance, funding, and advisory roles across investment banking and accounting sectors. Jeremy specializes in strategy management, technology commercialization, capital markets, and IP management. 

Company Overview

Neometals is an innovative mineral and advanced materials company focused on a sustainable future. The company seeks to de-risk and develop long-life projects with strong integrated partnerships throughout the value chain. The company is listed on the Australian Stock Exchange (ASX: NMT). The company was founded in 2001 and is headquartered in Australia. 

Neometals is a company that develops projects with materials and minerals for a clean energy future. All three of the company's projects are positively affected by electricity storage and EVs (Electric Vehicles). The company recently put out a press release regarding its decision to fund commercial operations for the battery recycling component. The company saw a 30% jump in its share prices in the past few months. 

The company held a general meeting with the shareholders which saw the approval of capital reduction and distribution of Widgie Nickel shares to the company's shareholders. The prospectus was then lodged with the ASIC (Australian Securities and Investments Commission). 

As per the proposal, the Neometals shareholders will get a distribution of Widgie Nickel shares, while the shares for foreign entities will be held by Euroz Hartleys, the broker for the deal. Once listed, Euroz Hartleys will then sell the shares in the market and remit the proceeds to the foreign shareholders. 

Neometals successfully completed their Vanadium recovery plant and is working towards finalizing the contractor to carry out the class 3 engineering cost study. This study is scheduled to conclude by 30th June 2022 along with a planned FID (Final Investment Decision) in December 2022. 

The Primobius Lithium Battery Recycling Project

The company's Primobius lithium-battery recycling project is being carried out in a JV (Joint Venture) with the SMS Group based out of Germany. The company has successfully commissioned the first stage of their demonstration plant where live batteries are destroyed and manually separated to collect black mass. The black mass will function as a feed for the hydrometer refinery in stage 2 of the operation. 

This advanced-level construction will start in September and trials will be run by October-November 2021. This Germany-based plant will have a processing capacity of 50t/day. The company has received inbound interest from German carmakers and cell makers for availing of commercial services. 

Since there's a significant amount of production scrap from Giga factories, warranty replacements, and battery recalls, the company has seen a surge in demand for commercial services. The company would require to make minor modifications to the plant and is looking to scale up its processing capacity from 1t/day to 10t/day. This limit will allow approved ongoing operations without partaking in a lengthy public process.

The current 10t/day plant is commencing operations in Hilchenbach, Germany. Neometals has a 50t/day operation planned in the future. Upscaling operations will enable the company to further de-risk their asset. The company has been successful in commissioning the front end and collecting black mass by shedding live cells from carmakers. This move has received a positive response from the shareholders and the company is looking to start offering this service commercially by Q1, 2022. 

Major Investments in the Battery Metals Space

Given the growing market interest in renewables, oil and gas giants such as BHP are offloading their assets to enter into battery metals. The US SPAC (Special Purpose Acquisition Company) recently raised $700M, bringing their overall evaluation to +$4Bn for carrying out battery recycling in the US. There have been huge investments by global miners in the battery market where Rio committed $2.4Bn to start production of lithium and boron in Jadar, Serbia. BHP signed a big off-take agreement for nickel sulphate with Tesla. These movements indicate strong growth in the market. It is projected that the European market for battery metals will grow to 2Mt within a decade. 

Environmental Considerations

The company's planning an evaluation study for their plant for a 50t - 20,000t daily supply. In the past year, it has become evident that even a large-scale plant with a 200,000t daily production will reach its peak capacity as the market continues to grow. The company is looking towards the ESG (Environmental, Social, and Governance) thematic along with the de-carbonization of transport. They are focused on reducing the carbon dioxide footprint of EVs where the battery manufacturing process is a major source of emissions. This makes hydro-metallurgical refining an attractive prospect. 

Neometals' main priority is on recycling sourcing feed and they are in talks with big partners to finalize investment decisions over the next 12-24 months to find debt-equity splits and other alternatives. 

The funding commitment by Neometals' shareholders in Primobius has the potential to make the asset the pre-eminent recycler in the western world. They are looking to enter hub and spoke arrangements with multiple customers and have MOUs signed with Stelco in North America, Hitachi in Japan, and the Asian market. The company is also in talks with various partners across the battery supply chain. 

To find out more, go to the Neometals Website