Neometals has secured an option to acquire an 80% equity interest in US-based Precious Metals Recovery (PMR), with the option expiring on 31 August 2024.
PMR operates a pilot plant, which is equipped with its proprietary technology for recovering precious metals from industrial waste streams.
To exercise the option, Neometals is required to pay a $50,000 option fee to PMR vendors, GreenFuels Energy and STRATA Trust Company, within three business days of executing the option agreement.
During the option period, Neometals will conduct due diligence on PMR and its business.
The purchase price for acquiring the majority stake in PMR from GreenFuels Energy and STRATA Trust Company is almost $10m.
Neometals must also issue $500,000 in shares to GreenFuels Energy, along with cash payments of $400,000 and $2m to GreenFuels Energy and STRATA Trust Company, respectively.
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Additionally, Neometals is obliged to make three subsequent payments of $2.37m to GreenFuels Energy on the first, second, and third anniversaries of the completion date, plus accrued interest.
Interest on each anniversary payment is set at 5% per annum.
Upon completion, Neometals’ subsidiary, Adamant Technologies, will hold an 80% interest in PMR.
PMR and Adamant, along with Sidvin Mintek, which holds the remaining 20% stake in PMR, will be governed by a limited liability company agreement.
The option agreement includes customary conditions, such as warranties and representations from the vendors and Sidvin regarding PMR’s assets and business.
This period allows Neometals’ technical team to complete its due diligence, which is crucial for the potential acquisition aligning with Neometals’ strategy to commercialise processes for recycling and recovery from waste streams.
PMR’s pilot plant in Colorado, US, has a 2tpd [tonnes per day] processing capacity and currently processes 0.5tpd, with feedstocks purchased from third parties.
If Neometals exercises the option, it plans to fund the initial purchase instalment from existing cash reserves.
However, the company has not yet decided to proceed with the option and is not committed to issuing shares for the transaction.
Neometals’ technical team has overseen an initial six-week metallurgical test work program on various feed sources, with results expected soon.
A second confirmatory test work programme is underway, targeted for completion in June 2024.
Neometals managing director Chris Reed said: “Our long-term relationship with members of the PMR team has enabled us to secure this exceptional opportunity to evaluate a potential source of short-term cashflow via precious metal recovery from industrial waste.
“Producing precious metals from industrial waste material is a natural hedge to our battery materials focused plant supply and technology licensing business models.
“We hope to confirm the technical feasibility of the PMR Technology to deliver the lowest quartile operating costs and show that precious metals production can be green too.”
