Neometals Ltd (ASX:NMT) is acquiring the Mt Edwards Lithium Project near Kalgoorlie in Western Australia for a cash consideration of $2.5 million and additional contingent payments.
The brownfields lithium exploration project is 40 kilometres from the Mount Marion mine in which Neometals has a 13.8% interest.
READ: Neometals progresses downstream integrated lithium supply chain strategy
Neometals managing director Chris Reed said: “This acquisition will increase and broaden our lithium asset base and, subject to exploration success, will potentially provide a second source of spodumene production enabling an integrated lithium business to grow in size and scale.
“Our strategy is to integrate to move down the cost curve then scale the business up to meet the demands of the next decade.”
Globally significant lithium province
The Mt Edwards Lithium Project is situated centrally within what is emerging as a highly endowed and globally significant lithium province.
Neometals now has a combination of tenements and mineral rights covering 240 square kilometres in this region.
The tenement package being acquired also contains several nickel assets.
Lithium hydroxide business planned
Neometals is evaluating a local lithium hydroxide facility in the Kalgoorlie region to process its offtake rights from Mount Marion (a minimum of 12.37% of production from February 2020).
The acquisition of the Mt Edwards Lithium Project adds a prospective brownfield holding to the pipeline of potential additional sources of spodumene to support Neometals’ strategy to build an integrated lithium business.
The company also owns 36% of Hannans Ltd (ASX:HNR) which holds a significant tenure package at Mt Holland, adjoining Kidman Resources(ASX:KDR)/SQM’s Early Grey Lithium Project in the Yilgarn Region.
READ: Neometals continues to advance titanium-vanadium direct shipping ore project
The company recently provided an update for its potential direct shipping ore (DSO) operation at its 100% owned Barrambie Project in Western Australia.
Barrambie is not only one of the world’s highest-grade titanium deposits, but it also has a significant endowment of high-grade vanadium.