Neometals share price soars on 'compelling' vanadium recycling results

The mineral explorer has released an exciting update on a vanadium recovery project.

| More on:
A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Neometals share price lifted 7.6% to trade at $1.06 at its intraday high on Friday
  • Its gains follow news the Vanadium Recovery Project – still in evaluation stages – could become an incredibly low-cost vanadium producer
  • The project's expected production has also increased

The Neometals Ltd (ASX: NMT) share price is leaping higher on Friday after the company announced it could become a notably cheap producer of vanadium.

The company is working to obtain a 50% stake in a venture developing a project to recover vanadium from steel-making by-product, slag.

Now, an operating cost estimate has found the project could be among the lowest-cost producers of the mineral.  

At the time of writing, the Neometals share price is $1.02, 3.55% higher than its previous close. Though, earlier today it hit a high of $1.06, representing a 7.6% gain.

Let's take a closer look at the latest news from the mineral explorer.

Why is the Neometals share price lifting?

The Neometals share price is taking off following an update on the Vanadium Recovery Project's feasibility study.

An engineering cost study has found the project – expected to be located in Finland – could be capable of producing 19 million pounds of vanadium each year at an average net operating cost of US$4.38 a pound. That places it in the lowest quartile of the industry cost curve.

Such an operating cost is higher than the project's pre-feasibility study's prediction of US$4.25 a pound. However, the latest study is notably more accurate and predicts greater production.

The latest findings have increased the project's expected annual throughput from 200,000 tonnes per annum to 300,000 tonnes per annum. They've also increased its expected capital costs from US$183.4 million to US$341 million.

Neometals can earn a 50% stake in the venture – owned by Scandinavia's Critical Metals – by funding and managing the project's evaluation.  

Today's announcement from the company notes the project "offers a compelling business case". That's underpinned by factors including access to very high-grade feedstocks and a low or net-zero greenhouse gas footprint.

Neometals managing director Chris Reed commented on the news driving the company's share price today, saying:

Security of supply is a key issue in Europe, vanadium has been on the list of Critical Raw Materials since 2017 and Russia supplied the bulk of Europe's vanadium feedstock in 2021. As Europe's only advanced high purity vanadium development project, [the project] is a strategically important asset.

Notwithstanding a reduction in technical risk, Neometals is cognisant of the global economic and geopolitical outlook, current state of financial markets, and the fall in the vanadium price which has increased the financial risk of the project.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A happy construction worker or miner holds a fistful of Australian dollar notes.
Materials Shares

$5,000 invested in BHP shares 5 years ago is now worth…

Will its shareholders be happy with their investment? Let's find out.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Materials Shares

Guess which ASX 200 stock is ending the week with a bang thanks to Rio Tinto

This stock has won a major contract from the mining giant.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Materials Shares

Is it time to buy ASX lithium shares?

Lithium prices continue to sink. Has this created a buying opportunity?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Materials Shares

Mineral Resources shares sink on Onslow Iron blow

This miner is having a tough session. Let's find out why.

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Materials Shares

MAC Copper shares in trading halt as miner flags 'potential control transaction'

MAC Copper shares are frozen while Sandfire Resources shares are the fastest risers of the ASX 200 today.

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Materials Shares

Bell Potter says this ASX lithium stock could rise ~50%

The broker has just put a buy rating on this lithium stock.

Read more »

A woman stands next to a large green battery smiling and eating an apple with a lifting green arrow line in the background, indicating rising stock prices.
Share Market News

Are Liontown Resources shares a buy, hold or sell according to Macquarie?

Here’s what the broker has to say about this Lithium miner. 

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Rio Tinto share price tumbles on CEO bombshell news

The mining giant is now looking for a new leader.

Read more »