Neometals (ASX:NMT) and its partners have scheduled a second lithium concentrate shipment for mid‐March from the Mt Marion Lithium Project in Western Australia.
The shipment has an anticipated tonnage of circa 15,000 tonnes with product grades of +6 and +4% lithium oxide.
This follows the inaugural shipment earlier this month.
Furthermore, The mine’s shareholders, Ganfeng Lithium, Mineral Resources (ASX:MIN) and Neometals have finalised negotiations regarding off-take arrangements and mining services.
Execution of formal documentation is expected by the end February 2017,
Operations update
The plant has successfully reached throughput at rates of 280 tonnes per hour and recoveries and product grades are in line with the ramp‐up plan.
The construction of the fines flotation circuit is expected to be completed by the end of February 2017 with commissioning scheduled to commence immediately.
Formal documentation
Execution of formal documentation is expected by the end of February regarding:
Off-take Arrangements
- Fix the 6% lithium oxide pricing (US$750 per dry metric tonne, CFR China) for shipments departing before 30 June 2017;
- Pricing of subsequent shipments is to be set on a 6‐month basis by a formula based on a weighted average price of Chinese imports of lithium carbonate and lithium hydroxide (based on published import statistics) plus a floor price consistent with original off-take agreement; and
- Expand the scope of the off-take agreements for the Mt Marion Project to 400,000 tonnes per annum of spodumene concentrates to include any sub‐6% lithium oxide production.
Mining Services Arrangements
- To vary the existing Mining Services Agreement to cover production of coarse and fine sub‐6% lithium oxide products in line with above off-take arrangements;
- Subject to agreement on final commercial pricing, to further vary the Mining Services Agreement to upgrade sub‐6% lithium oxide products to all +6% lithium oxide product, resulting in 400,000 tonnes per annum of +6% lithium oxide concentrates. Mineral Resources have ordered long lead items. It is expected that construction will commence in March 2017 without negative impact on production and with transition to all 6% lithium oxide production by the end of CY2017.
Background
The Mt Marion Lithium Project is owned by:
- 43.1% Mineral Resources (ASX:MIN);
- 43.1% Ganfeng Lithium; and
- 13.8% Neometals.
Minerals Resources is the project operator and Australia’s largest contract minerals processor.
Ganfeng is China’s leading, most profitable lithium producer and has secured a life-of-mine, take-or-pay off-take agreement for Mt Marion.
Neometals’ strategy is to grow market cap by maximising return from existing operations, increasing margins via higher value downstream products and developing growth options.
The share price has increased 75% over the past 12 months, currently trading at $0.34.