REG - Neometals Ltd - Option to acquire Precious Metals Process & Plant

NeometalsAnnouncement

28/05/2024 07:00

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RNS Number : 9643P  Neometals Ltd  28 May 2024

This announcement contains inside information

 

28 May 2024

Neometals Ltd

("Neometals" or "the Company")

Option to acquire Precious Metals Waste Recovery Process and Plant in US

Highlights

·      Neometals secures option to acquire an 80% equity interest in a
private US company which has developed a process to selectively recover
precious metals from industrial waste streams;

·      The purchase price for the 80% equity interest is approximately
US$10 million (A$15.4M), payable by way of a combination of staged cash and
equity in Neometals;

·      The potential for short-term cash generation from debottlenecking
the pilot plant and increasing the recovery of precious metals from waste is
consistent with Neometals' strategy; and

·      Neometals' technical team has completed an initial six-week
variability test work program and commenced a second program in parallel with
financial and legal due diligence work streams.

Sustainable process technology developer, Neometals Ltd (ASX: NMT & AIM:
NMT) ("Neometals" or "the Company"), is pleased to announce it has secured an
option, expiring 31 August 2024 ("Option" and "Option Agreement"), to acquire
an 80% equity interest of US business, Precious Metals Recovery, LLC ("PMR").
PMR operates a pilot plant which demonstrates its proprietary
hydrometallurgical processing flowsheet ("PMR Technology") to recover precious
metals from industrial waste streams. The Option period allows Neometals'
technical team to complete its due diligence on PMR and its business
(including the PMR Technology).

 

The potential acquisition of a controlling interest in PMR (the "Transaction")
is consistent with Neometals' focus on commercialising processes that produce
critical materials from recycling and recovery from waste streams. This
opportunity affords Neometals the ability to operate as principal and
diversify its commodity and business model exposure from technology licensing
of battery materials processes.

 

The pilot plant, located in Colorado, represents the culmination of nearly two
years of research and development activities, including successful processing
of over one hundred batches of industrial waste, ranging from 100 kg to 250 kg
in size. The pilot plant is designed to process 2 tonnes per day and is
currently capable of processing 0.5 tonnes per day. Industrial waste
feedstocks are purchased from third parties on an as required basis.

 

Neometals Managing Director, Chris Reed says:

 

"Our long-term relationship with members of the PMR team has enabled us to
secure this exceptional opportunity to evaluate a potential source of
short-term cashflow via precious metal recovery from industrial waste.
Producing precious metals from an industrial waste material is a natural hedge
to our battery materials focused plant supply and technology licensing
business models. We hope to confirm the technical feasibility of the PMR
Technology to deliver lowest quartile operating costs and show that precious
metals production can be green too."

 

Key Terms

 

The key terms of the Option are:

 

·      Option fee of a total of US$50,000 payable by Neometals to PMR
vendors, GreenFuels Energy LLC ("GFE") and STRATA Trust Company ("STC"),
within 3 business days of execution of the Option Agreement.

·      Throughout the Option period, NMT will have full access to
conduct due diligence on PMR and its business (including the PMR Technology)
to determine whether or not to exercise the Option.

·      The Option is exercisable any time until 5.00pm Perth time on of
the 31st August 2024.

·      Completion of the Transaction will occur on the date that is 5
business days after exercise of the option ("Completion Date").

·      The purchase price for acquiring 80% of the issued share capital
of PMR from GFE and STC is approximately US$10,000,000 payable as follows:

•     On the Completion Date, Neometals must:

•     issue US$500,000 in Neometals shares (based on an ASX VWAP of
Neometals shares for the 10 ASX trading days up to but excluding the business
day prior to the Completion Date) to GFE;

•     pay in cash US$400,000 to GFE and US$2,000,000 to STC; and

•     Neometals must make three subsequent payments of US$2.370,000 to
GFE on or before the 1 year, 2 year and 3 year anniversaries of the Completion
Date (each an "Anniversary Payment") plus accrued interest. Each Anniversary
Payment accrues interest at the rate of 5% per annum on the basis of a 365 day
year, for the actual number of days elapsed from and including the Completion
Date.

·      Neometals' wholly owned subsidiary Adamant Technologies Pty Ltd
("Adamant") will hold the 80% interest in PMR from the Completion Date.

·      From the Completion Date, PMR, Adamant and Sidvin Mintek, LLC
("Sidvin") (the remaining 20% PMR shareholder and owned by the technology
inventor) will be bound by a limited liability company agreement regulating
the conduct of PMR on terms to be agreed between Neometals/Adamant and Sidvin.

·      The Option Agreement contains other terms and conditions
customary for an agreement of its nature, including warranties and
representations from the Vendors and Sidvin regarding PMR, its assets and its
business.

If it exercises the Option, Neometals proposes to fund the initial purchase
instalment from existing cash reserves. For clarity, Neometals has made no
decision to proceed with exercising the Option and in that regard is not
committed to proceeding with the issue of shares (as a component of the
purchase price) in relation to the Transaction. Neometals' issuance of shares
in relation to the Transaction is subject to its decision whether or not to
proceed with exercising the Option, as informed by the outcome of its due
diligence on PMR and its business (including the PMR Technology).

Next Steps

 

Neometals technical team has supervised the completion of an initial six-week
variability metallurgical test work program on multiple feed sources with
varying reagent and final product recovery regimes. Results from the initial
program are expected in the coming weeks. A second confirmatory test work
program on the most successful feedstock/reagent/recovery regimes has
commenced and is targeted for completion in June 2024. Neometals will continue
to update the market regarding progress on the key milestones in relation to
the Transaction.

 

Authorised on behalf of Neometals by Christopher Reed, Managing Director.

-ENDS-

For more information, please contact:

 

 Neometals Ltd
 Chris Reed, Managing Director & Chief Executive Officer       +61 8 9322 1182
 Jeremy McManus, General Manager - IP & IR                     +61 8 9322 1182

 Cavendish Capital Markets Ltd - NOMAD & Broker
 Neil McDonald                                                +44 (0)131 220 9771
 Peter Lynch                                                  +44 (0)131 220 9772
 Adam Rae                                                     +44 (0)131 220 9778

 

About Neometals

Neometals facilitates sustainable critical material supply chains and reduces
the environmental burden of traditional mining in the global transition to a
circular economy.

The Company is commercialising a portfolio of sustainable processing solutions
that recycle and recover critical materials from high-value waste streams.

Neometals' core focus is on the commercialisation of its patented, Lithium-ion
Battery ("LiB") Recycling technology (50% NMT), under a plant supply and
technology licensing business model.  Primobius GmbH is the 50:50
incorporated JV with 150-year-old German plant builder, SMS group GmbH, that
is commercialising the technology. Primobius is building a 2,500tpa recycling
plant for Mercedes-Benz under a long-term Cooperation Agreement.  It also
operates its own LiB disposal service in Germany and plans to offer its first
commercial 21,000tpa plant to North American licensee, Stelco, in JunQ 2025.

Neometals is also developing two advanced battery materials technologies for
commercialisation under low-risk, low-capex technology licensing business
models:

·      Lithium Chemicals (70% NMT) - Patented ELi™ electrolysis
process, co-owned 30% by Mineral Resources Ltd, to produce battery quality
lithium hydroxide from brine and/or hard-rock feedstocks at lowest quartile
operating costs. Pilot scale test work and Engineering Cost Study update
planned for completion in DecQ 2024; and

·      Vanadium Recovery (100% NMT) - Patent pending hydrometallurgical
process to produce high-purity vanadium pentoxide from steelmaking by-product
("Slag") at lowest-quartile operating cost and carbon footprint.

For further information visit www.neometals.com.au
(http://www.neometals.com.au/)

 

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