E26: Chris Reed-ing & Re-cycling Mt. Marion. Neometals
In the latest episode of Lithium-ion Rocks!, Howard Klein and Rodney Hooper take a look at the latest Lithium market happenings. S2 E26.
Chris Reed and Neometals monetized a $3M investment in Mt Marion into $200M cash over a 10-year period since bringing Mineral Resources in as Build Own Operater with 30% project interest in 2010. No Stranger, Chris Reed, descendant of mining royalty & man of deep global lithium expertise at the epicenter of the last decades boom busts, shares the great history in partnering to create the worlds second most important hard rock lithium resource - a secure, sustainable supplier to green European sensitivities at VW & BMW, for example, via China Girl Ganfeng - while maintaining strong economics for both miner and processor of this pioneering 50:50 JV.
Mineral Resources now has strong JVs in Western Australia with the two most important lithium producers globally - Albemarle and Ganfeng. How might this dynamic evolve over time?
Neometals has done well by its shareholders - returning cash via dividends and buybacks, as it has monetized Mt. Marion, while at the same time, maintaining a 20-person staff "project generating" new ventures. With NMT trading at about its cash balance of AUD 108M, Mr. Market seems to assign no value to this team of proven value creators.
That could change in 2020/21 as Neometals advances its exceptionally high IRR - 72% - low Capex - USD 66M - recycling project in partnership with Germany industrial giant SMS. With Auto OEMs in particular government mandated to re-cycle their exponentially growing universe of EV batteries, this emerging industry is destined to be a hot development area over the next decade. Neometals is one of the few public plays in the re-cycling space.
Chris discusses Neometals revenue potential from recycling services, licensing and sale of recovered cobalt, nickel, lithium, copper, iron, aluminium, manganese into saleable products using its proprietary, sustainable process recovering materials from consumer electronic batteries (lithium cobalt oxide (LCO) cathodes), and nickel‐rich electric vehicle and stationary storage battery chemistries (lithium‐nickel-manganese‐cobalt (NMC) cathodes).
Chris also shares some thoughts on the new Lithium Paradigm with volume purchaser Auto OEMs treating lithium as they do all their other "suppliers".
Not Investment Advice. Do Your Own Research