Neometals (LON: NMT) (ASX: NMT) shares were down 10% today and have recovered to 3% down. NMT shares fell on joint announcements about titanium and vanadium projects. It’s perhaps not fair to be quite as harsh as that headline - the titanium project’s a bust but look at how lovely vanadium is looking - but then there’s a certain enjoyment to being harsh at times. It’s also true that a healthy attitude toward corporate announcements includes the concept that you can never be too cynical.
The vanadium announcement is really just a “things progress” one: “Innovative battery materials recycler, Neometals Ltd (ASX: NMT & AIM: NMT) ("Neometals" or "the Company"), advises that the Finnish Vanadium Recovery Project ("VRP1") special purpose vehicle, Recycling Industries Scandinavia AB ("RISAB"), is making solid progress in securing debt and equity financing required to make a FID.” Well, super. And there’s not a great deal more in the announcement than that. We very strongly suspect that the only reason for the issue of this note to the market is this other one that they really did have to release.
About titanium: “Innovative battery materials recycler, Neometals Ltd (ASX: NMT & AIM: NMT) ("Neometals" or "the Company"), announces that its wholly owned subsidiary Australian Titanium Pty Ltd has been unable to advance from offtake term sheet1 to binding take or pay offtake agreement with Jiuxing. Both parties have invested significant time and money evaluating the feasibility of using Barrambie MGC in Jiuxing's downstream titanium processing facilities. Regrettably, the broader macroeconomic backdrop has required Jiuxing to adjust its production plans and shelve further Barrambie related activities. The Company is continuing its engagement with other third-party titanium producers and mining services companies in relation to offtake, equity investment and development financing.”
And, well, umm…..
Neometals share price from Google Finance
We’ve talked before about Neometals: “The NMT share price mover is the news that they’ve been granted an Australian patent on one part of their lithium battery recycling process. Which is nice, obviously, but not that nice equally clearly.” And before that, about the NMT vanadium: “Neometals (LON: NMT) is running an entirely achievable vanadium recovery project. We know this is achievable because other people do much the same thing. It's one of the oddities of that vanadium market that while the major current use is in steel it's also the making of iron that is a major source. By processing the status of using vanadium rich iron ore it is possible to reclaim the vanadium pentoxide which is then the starting point for vanadium enriched steels.”
The thing that strikes us here though. If one Chinese titanium processor is unwilling to sign an offtake agreement on “economic” grounds then what guarantee is there that anyone else will be interested? Titanium sands, leading to TiO2 production, is pretty much a commodity business these days. So, if economic factors affect one then why not all?
That is, an absence of one buyer could mean an absence of all.
