Neometals (ASX: NMT) has entered into a memorandum of understanding (MoU) with a Chinese research organisation to jointly advance development of the company’s Barrambie Titanium-Vanadium Project in Western Australia.
The MOU with the Institute of Multipurpose Utilisation of Mineral Resources Chinese Academy of Geological Sciences (IMUMR) will commence with evaluation activities (including a hydrometallurgical processing demonstration plant) and outlines a potential pathway towards a 50:50 joint venture to advance the exploitation of the Barrambie Project.
IMUMR is among the top Chinese metallurgical institutes and has extensive experience in mineral processing and smelting of vanadiferous-titanomagnetite (VTM) concentrates. Importantly, IMUMR also has acknowledged expertise and deep relations with China’s titanium and vanadium chemical processing industry.
Neometals’ Managing Director Chris Reed said IMUMTR has previously conducted beneficiation and pyrometallurgical test-work on bulk-ore samples from Barrambie and from those studies is intimately familiar with the Barrambie orebody.
Under the MOU, Neometals’ current pilot test work programme for the production of high-purity titanium and vanadium chemicals from the titanium-rich Eastern Band of Barrambie will continue with beneficiation occurring in Australia.
Subject to IMUMR and the company being satisfied with the pilot study results, and subject to a decision to proceed with the Demonstration Plant, mineral concentrate will be sent to China in the first half of 2020 for further processing.
“IMUMR’s commitment bodes well for further development at the Barrambie VTM project and supports the Neometals development and acquisition costs to date to prove up the Barrambie resource as one of the world’s richest titanium and vanadium deposits,” Mr Reed said.
“China is the largest producer of titanium and vanadium chemical products in the world, with applications spanning titanium pigment, aerospace alloys and energy storage applications.
“Chemical producers need secure long-term sources of upstream feed sources with credentialed partners to undertake mining and beneficiation in first world jurisdictions.
“Neometals successfully developed its Mt Marion lithium project by building inherent value and then fast-tracking development with strong partners. We intend to adopt a consistent development approach at Barrambie, albeit retaining a more material JV interest in the operating integrated project.”
IMUMR will fund the Demonstration Plant at its extensive test work facilities in China and if the results from Demonstration Plant trials are satisfactory, the parties will jointly fund a Class 3 Engineering Cost Study (ECS) to evaluate a mining and concentrating operation at Barrambie with subsequent downstream processing in China.
Following completion of the ECS, the parties will review the ECS to determine whether to proceed to a final investment decision and negotiate in good faith the terms of the 50:50 JV.
This MOU is significant as the partnership sets the stage for value realisation at Barrambie and has the potential to reduce Neometals’ development costs considerably,” Mr Reed said.
“It should also be recognised that IMUMR has a Chinese national mandate that includes development of upstream supply chains for industries of strategic relevance to China.
“IMUMR will have the right (subject to Neometals approval) to assign its interests under the MOU to a commercial Chinese chemical processing partner.
It is anticipated that test work and engineering studies will take approximately 18 months, leading to JV FID consideration around mid-2021.
