The Neometals (ASX:NMT) share price is soaring. Here’s why

The Neometals Ltd (ASX: NMT) share price has been on the move after a flurry of updates last week from the small-cap mineral project developer. 

The company’s shares have flown more than 12% today to 28 cents per share, putting the Neometals share price up by 21.74% in just over a week.

The recent gains take Neometals’ returns for the year to 40%, excluding dividends.

A second life for lithium

One of Neometals’ key projects is its lithium-ion battery recycling joint venture with SMS group and Primobius.

On 21 December Neometals informed the market that the joint venture is making strong progress towards commercialisation of lithium-ion battery recycling in Europe. Construction has been permitted for its German demonstration plant, where the recycling process and performance will be showcased.

In the release, Neometals highlighted that “Primobius goes into its demonstration plant trial with confidence from pilot trial data that the key payables (nickel and cobalt sulphate) are higher purity than required by Chinese national specifications for cathode use.”

Neometals also highlighted that it is in discussions with potential ‘off-takers’ of materials that are recovered during the demonstration trials.

Simplified production

On 22 December, Neometals notified the market that it has established a ‘breakthrough’ simplified process for separating ilmenite and vanadium-rich magnetite concentrates that meet commercial specifications.

The method reportedly uses ‘conventional reduction roasting’ and magnetic separation of concentrates. Samples are in transit to the Institute of Multipurpose Utilisation of Mineral Resources Chinese Academy of Geological Sciences in China for validation of the process.

Neometals stated that it has also engaged contractors for an onsite mining and gravity concentrate operation based on this process.

There’s more where that came from

Lastly, on 23 December, an update regarding Neometals’ Zabel Nickel mineral deposit was released. The company increased its estimates of tonnes and grade to now be 351,000 tonnes at 1.9% nickel.

The new estimates are a result of the ongoing review of historical findings and new data. Neometals plans to undertake future drilling to gather more information before moving towards mining studies.

Tailwinds

The urgency for lithium-ion recycling has been ushered in by new mandates in Europe to recognise such batteries as hazardous waste. As more government regulations are introduced internationally there will be a high demand for a recycling solution.

In addition to that, we’re coming into an era of electric vehicles (EV), and demand for these EVs are growing rapidly. Small lithium-ion batteries in our mobile devices are one thing, but soon enough we may have tens of millions of car-sized lithium-ion batteries. These resources are also finite, therefore with time, sourcing the materials to manufacture batteries will become increasingly expensive unless there is the ability to recycle. 

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Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

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