NEOMETALS LTD The directors of Neometals Ltd ("Company") ("Neometals") submit herewith the financial report of Neometals and its subsidiaries ("Group")("Consolidated Entity") for the half-year ended 31 December 2015. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
The names of the directors of the company during or since the end of the half year are:
Mr S. Cole - Appointed 24 July 2008
Mr D. Reed - Appointed 20 December 2001 Mr C. Reed - Appointed 20 December 2001
REVIEW OF OPERATIONS
Neometals Ltd's (ASX: NMT) primary focus during the half year centred on progressing its advanced minerals projects, Mt Marion and Barrambie, and technology developments associated with its lithium and titanium interests.
During the period Reed Industrial Minerals Pty Ltd (RIM) continued to advance the Mt Marion Lithium concentrate operation (Mt Marion) with the commencement of construction following the positive final investment decision and financial completion of offtake and equity investment of Ganfeng Lithium Co., Ltd, China's leading lithium producer.
As at 31 December 2015 RIM was owned 45%:30% and :25%respectively by Neometals Ltd (Neometals), leading mining services provider Mineral Resources Limited (MRL) through their subsidiary, Process Minerals International Pty Ltd (PMI) and Ganfeng.
PMI commenced the construction phase of Mt Marion in the December 2015 quarter. Construction progresses on schedule in all material respects with first production expected by mid-2016 from the Project, which is designed to produce more than 200,000tpa of chemical grade spodumene concentrate.
Mt Marion is a globally significant lithium deposit, containing total Indicated and Inferred Mineral Resources of 23.24Mt at 1.39% Li2O and 1.43% Fe2O3, at a cut-off grade of 0% Li2O (Appendix B). The project has a granted Mining Proposal and received its Works Approval for plant construction, on the 18th of December 2014.
Figure 1. Project milestones
Figure 2. Project layout
Please also refer to Events subsequent to Balance Date note 12.
During the December 2015 quarter a strategic resource expansion drill program commenced in which up to 335 reverse circulation (RC) holes and 30 diamond holes will be drilled. The drill program is expected to be completed in the June quarter 2016, with an upgraded Mineral Resource Estimate and Ore Reserve planned to be completed in the June and September 2016 quarters respectively.
The RC and diamond drilling program is aimed at extending the open pitable minelife through the extension to and in-fill drilling of existing deposits, as well as the definition of new resources from outcropping pegmatite prospects on lithium rights acquired from Metals X Ltd in July 2015.
Figure 3. Exploration milestones
Figure 4. Mineral Resource Estimate and Exploration Target outlines over tenure
In September 2015 all downstream lithium processing technology and patents were transferred from RIM to a dedicated vehicle, Reed Advanced Materials Pty Ltd ("RAM"). On 6 October 2015 Neometals and PMI entered into a shareholders agreement for the purposes of establishing and operating a joint venture arrangement through RAM to operate a business of researching, designing and developing the capabilities and technology relating to the processing of lithium hydroxide. Following the execution of the shareholders agreement RAM was held 70:30 between Neometals and PMI. The technology will use the brand name ELi. During the later part of 2015 a Definitive Feasibility Study ("DFS") commenced for the commercialisation of RAM's ELi downstream processing technology in a 15,000 - 20,000tpa LCE lithium hydroxide plant.
The DFS is supported by an Engineering Cost Study ("ECS") to give capex and opex estimates to the required level of accuracy. M+W (Singapore) commenced work on the ECS component of the DFS during the period. The DFS is on track for completion by the end of Q2 2016.
One of the world's leading lithium producers has announced that effective 1 October 2015 its lithium compound prices will be increased by 15%. Market growth is underpinned by the increasing market penetration of renewable energy storage, and electric/ hybrid electric vehicles (EV and HEV) in commercial and private applications.
The current median prices for battery-grade lithium hydroxide and lithium carbonate are US$9,000 and US$7,000 per tonne, respectively, on a CIF basis to Europe and US respectively (source: Industrial Minerals 21 January 2016).
The price of chemical grade lithium concentrates (6% Li2O) are US$440 per tonne on a CIF basis to China. (source: Ganfeng 27 January 2016).
Neometals Ltd. issued this content on 10 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 10 March 2016 09:33:29 UTC
Original Document: http://www.neometals.com.au/reports/654-NMT_HYF_2015.pdf
