Explorers Neometals and Mineral Resources have announced that they have begun construction work at their Mount Marion lithium project in Western Australia.
The companies have also secured formal agreements with the second largest lithium producer in China, Jiangxi Ganfeng Lithium.
“As contemplated by the Share Sale, Subscription and Option Agreement, the parties have entered into a Shareholders Agreement to govern their investments in Reed Industrial Minerals Pty Ltd (“RIM”), the owner of the Project. In addition, RIM has entered into a life-of-mine Offtake Agreement with Ganfeng, and a Mining Services Agreement with MIN for the construction and operation of the Project on a Build-Own-Operate basis. The completion of these agreements constitutes the Final Investment Decision,” the company said.
Now, Neometals now holds 45% of the project, Process Minerals International (a wholly owned subsidiary of Mineral Resources) holds 30%, while Ganfeng has 25%.
According to the official announcement, first production from Mt Marion is expected in mid-2016. The project will deliver about 200,000 t/y of chemical grade spodumene concentrate.
“This heralds a new chapter for Neometals as we move into the construction phase of Mt Marion. We have successfully executed our strategy to bring Mt Marion to fruition teaming with a partner who provides expertise in construction and processing as well as securing a valuable offtake partner. We look forward to keeping shareholders updated with the construction progress over coming months,” said Chris Reed, Neometals Managing Director.
Neometals has received a net amount of US$19.75 million from Ganfeng in respect to the equity investment in RIM.
The Mt Marion Lithium Project is located approximately 40km south west of Kalgoorlie, Western Australia.