The Neometals Ltd (ASX: NMT) share price has rocketed to a new 52-week high on Friday after a key new agreement with a Chinese producer.
The post Why the Neometals (ASX:NMT) share price has surged to a 52-week high appeared first on The Motley Fool Australia. –
The Neometals Ltd (ASX: NMT) share price is on the charge today. Shares in the Aussie miner have rocketed 7.9% higher at the time of writing to 48 cents per share – a new 52-week high.
Why is the Neometals share price surging higher?
The big news today was a new agreement to sell titanium to a Chinese titanium slag producer. Neometals has signed a memorandum of understanding (MOU) with Jiuxing Titanium Materials (Liaonging) Co. Ltd.
That news has helped propel the Neometals share price to a new 52-week high during Friday trading. According to the release, the MOU contains an evaluation framework and key commercial terms.
That MOU will help the parties work towards a binding formal offtake agreement for the supply of 800,000 dry tonnes per annum (dtpa) of mixed gravity concentrate or 500,000 dtpa of ilmenite and 275,000 dtpa of iron-vanadium concentrate for a 5-year period on a take-or-pay basis from first production.
It’s a significant agreement that centres on Neometals’ Barrambie Titanium and Vanadium Project. Neometals says that the Barrambie site is the most advanced, undeveloped hard-rock titanium mineral resource in the country.
The Neometals share price is climbing on the back of the update which included a set of next steps. Neometals will mine a 250-tonne bulk sample from Barrambie and transport mixed concentrate to China.
Jiuxing will blend and batch smelt 100 tonnes in its commercial titanium smelter with negotiation of full-form offtake agreements and BOO/T agreements.
The Neometals share price has charged higher to a new 52-week high in early afternoon trade. That comes on the back of a significant milestone deal for its Barrambie Project.
Today’s MOU announcement brings Neometals one step closer to a major, binding supply agreement to a leading Chinese titanium producer.
That has buoyed investors spirits and pushed shares in the Aussie mining group higher.
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Motley Fool contributor Ken Hall 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.