Neometals: Not their first rodeo – gearing up to build another mine – this time it’s titanium
Neometals Managing Director Chris Reed on 3AW, 2GB & 6PR Bulls N' Bears Report
Listen to ASX-listed Neometals Managing Director Chris Reed talk to Matt Birney on the Bulls N’ Bears Report about Neometals’ massive titanium project that will pump out over $100m a year for at least the first five years in pre-tax free cash.
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After starting and selling a successful lithium mine, Neometals is now a leader in the battery metals technology space with lithium battery recycling projects in Canada and Germany, a lithium chemicals project in Portugal and a vanadium waste recovery play in Finland. Notably, it has some 13 patents and another 56 pending across its portfolio of proprietary battery metals technologies. More recently however the company scrubbed up its massive Barrambie titanium project in WA with an updated pre-feasibility study that contains a lovely set of numbers.
RADIO INTERVIEW - TRANSCRIPT
Matt Birney - Welcome to Bulls N' Bears brought to you today by ASX 300 project developer Neometals.
Matt Birney - ASX code: NMT
Matt Birney - I'm Matt Birney and I'm joined now by the Managing Director of Neometals, Chris Reed.
Matt Birney - Hi Chris.
Chris Reed - G'day Matt.
Matt Birney - Well after starting and selling a successful lithium mine, Neometals is now a leader in the battery metals technology space with lithium battery recycling projects, a lithium chemicals project, and a vanadium waste recovery play.
Matt Birney - Notably, the company has some 13 patents and another 56 pending with respect to its proprietary battery metals technologies. More recently however the company scrubbed up its massive Barrambie titanium project in WA with an updated pre-feasibility study that contains a lovely set of numbers.
Matt Birney - Okay Chris your titanium project in WA is starting to look very interesting. Tell me what's titanium typically used for and what does the market look like?
Chris Reed - Look it's a fantastic market. You've got demand growing at about three per cent. Its applications, predominantly paint, paper, pigment, plastics. An increasing amount is going into titanium metal which is what we're focused on.
Matt Birney - So tell me about Barrambie. What's the resource there now and how does it compare to your peers would you say?
Chris Reed - Yeah the resource is about 280 million tonnes down to a vertical depth of 70 meters over 11 kilometres so it's a massive deposit, it's the world's second highest grade hard rock deposit. Fantastic potential for strike extensions and depth extensions.
Matt Birney - Who do you sell the product to? Anybody putting their hand up for it?
Chris Reed - Absolutely so you know recently we've signed an off-take term sheet with Jiuxing Titanium who's the largest titanium slag producer in China and they supplied the largest titanium metal producer in China.
Matt Birney - So this isn't your first rodeo. You initiated the Mt Marion lithium mine in WA that was very successful. What does your plan look like to get this thing into production?
Chris Reed - Matt we will follow the same recipe so you know a low-cost phase development initially we'll look at DSO, direct shipping ore, followed by then producing our concentrate, exporting them to China.
Chris Reed - We can always downstream in the future so we're looking to execute that with contract miners, contract crushing and screening, contract haulage, really to minimize the amount of capital that we put in.
Matt Birney - What's the project mine life and what's the average annual expected free cash before tax?
Chris Reed - Yeah look, the mine life at the moment is 13 years. That will grow with more drilling and in terms of the average annual cash flow for the first five years of that off-take agreement, we average more than 100 million Australian dollars per round on free cash.
Matt Birney - And what will it cost you to build? What's the IRR and what's the Net Present Value projected for the project in today's money?
Chris Reed - Yeah so look the, in terms of the metrics, it's a 45 per cent IRR on a capital cost of 215 million. We can do that in two stages about 80 for the direct shipping and about 140 for the concentrate and the pre-tax NPV using a 10 per cent discount rate is 375 million.
Matt Birney - Chris Reed from Neometals.
Matt Birney - Thanks for joining me on Bulls N' Bears and remember we're only here to give you information, not advice which you should of course seek independently.
Matt Birney - I'm Matt Birney and this is Bulls N' Bears.
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