Neometals : Commences Update Of Barrambie DFS

16 November 2018

NEOMETALS COMMENCES UPDATE OF BARRAMBIE

DEFINITIVE FEASIBILITY STUDY

Highlights

• • Record high vanadium prices (US$130/kg V) and robust market outlook support the commencement of a formal update to the historic Barrambie Vanadium Definitive Feasibility Study.

• • The updated Study will examine staged development options including offshore processing of crushed ore, onsite production of a high-grade concentrate for sale, and refining to produce vanadium chemical products.

• • Adaman Resources appointed to complete mining, crushing and transport cost studies. Snowdens appointed to estimate Ore Reserves. Ausenco appointed to prepare new Operating and Capital Cost Estimates.

• • The Barrambie deposit sits on a granted mining lease, with full native title agreement and ministerial approval for the development of an open-cut mine and processing plant in 2012, extension of term currently pending.

• • Updated Barrambie Defintive Feasibility Study scheduled for completion in the June quarter 2019.

Industrial minerals project developer, Neometals Ltd (ASX: NMT) ("Neometals" or the "Company"), is pleased to announce the formal commencement of an update to its 2009 Definitive Feasibility Study ("DFS") that considered primary vanadium production from the traditional salt roast-leach operation at the Barrambie Vanadium-Titanium-Magnetite ("VTM") project ("Barrambie"). The updated DFS ("Updated DFS") will be JORC 2012 compliant based on the latest Neometals 2018 Mineral Resource Estimate (see Neometals ASX announcement dated 17th April 2018).

Barrambie is one of the world's highest-grade hard rock titanium deposits and hosts one of the largest vanadium projects globally. Optionality afforded by distinct high-grade zones and co-product streams has driven Neometals to consider a staged development approach. The Company is investigating direct shipping ore ("DSO") being toll concentrated for sale to processors in China in parallel with the development of on-site concentration and refining operations (see Figure 5).

Neometals has engaged a range of expert consultants to work on various parts of the Updated DFS, which will collectively reveal the technical feasibility and economic viability of each individual stage of development with completion expected in the June quarter 2019. In parallel, the Company is continuing to advance discussions with potential offtake parties for supply of ore, concentrates and chemical products.

Chris Reed, Neometals Managing Director said "With strong vanadium pricing and end-users demanding secure supply of quality feedstocks from low-risk jurisdictions, Neometals is moving quickly to capitalise on this significant market opportunity. Barrambie has played second fiddle in recent years to our lithium endeavours, however it is to our knowledge, the most advanced, undeveloped greenfields vanadium project globally. Our extensive historical exploration and evaluation works enable us to fast-track an updated DFS. This step-wise approach is consistent with the staged development and de-risking strategy we employed to successfully develop our lithium business."

ACN 099 116 361	Locked Bag 8	T: [phone]	[e-mail]
Level 3, 1292 Hay Street	West Perth WA 6872	F: [phone]	neometals.com.au
West Perth WA 6005

Background on Barrambie

Located approximately 80km North West of Sandstone in Western Australia, Barrambie has a granted mining permit and is 100% owned by Neometals through Australian Titanium Pty Ltd. Barrambie has had approximately A$30M exploration and evaluation expenditure invested in it since 2003 and is one of the world's highest-grade titanium-vanadium hard-rock assets. Barrambie development was paused after completion of the 2009 DFS where prices remained stagnant for more than six years following the global financial crisis. A strong market backdrop for both vanadium and titanium has driven Neometals to accelerate its development plans at Barrambie where optionality afforded by distinct high-grade zones and the possibility of co-products is driving staged development evaluation for multiple products.

Figure 1: (Left) Barrambie project location and (Right) Plan of Project tenure over outline of the Mineral Resource. Distribution of titanomagnetite (VTM) mineralization along strike and to the west of Barrambie is based on interpretation of aeromagnetic data.

Figure 2: Cross section showing typical distinct layers of high-grade vanadium and titanium bands

Figure 3: Chart showing Barrambie project scale against select Primary Vanadium Projects.

Figure 4: Mineral Resource Estimate - April 2018.

Barrambie Evaluation and Development Strategy

Since 2017 there have been significant increases in vanadium prices which has seen record highs traded (> US $ 130/kg V). The strong vanadium market has been driven by reduced long-term production capacity (from shutdowns caused by environmental regulation in China), limited new mine production, increased vanadium requirements in new Chinese rebar standards, and increasing consumption of vanadium in aerospace alloys and stationary storage applications.

The Updated DFS will evaluate a range of processing options for a staged Barrambie development. Phase 1 contemplates extraction of the high vanadium Central Bands and/or the high-titanium Eastern Band, onsite crushing and screening before being processed into concentrates offshore (DSO option). Early revenues from toll concentrate sales to processors in China could provide capital to pursue integrated on-site vanadium concentrate (Phase 2) and chemical production via a standard salt roast leach process (either vanadium pentoxide flake (99% V2O) and/or Ferrovanadium (FeV)(see Figure 4 below). Similar to the Neometals integrated lithium strategy, the Barrambie development will look to generate earnings, de-risk each stage of the flowsheet and attract strong partners where appropriate.

Figure 5: Image depicting the staged development strategy being evaluated in the Updated DFS.

Figure 6: Image depicting the processing steps being investigated in the Updated DFS on the Central and Eastern Bands. The dotted 'Battery Limit' lines show where the scope of the Updated DFS stops.