Metalstech can’t make up its mind: today it’s selling lithium, keeping cobalt
After some soul searching, it looks as if MetalsTech could now be farming out its lithium projects and committing its resources to its cobalt projects.
The company (ASX:MTC), which originally listed on the ASX as a lithium play in February last year, was planning to spin out its cobalt assets into a new company so it could return to its original sole focus of lithium.
However, last week MetalsTech announced it was ditching its proposed demerger because it had “recognised the strategic value” of keeping its cobalt assets in Ontario.
Now the company has told investors that it has “received significant interest” for a “project-level” sell down of its lithium assets.
Shares dipped 4 per cent to 24c on Wednesday morning.
“The board determined that keeping the Bay Lake cobalt project and settling the option to acquire the past-producing Rusty Lake silver-cobalt mine and developing these high value assets in its own, MTC shareholders would have the best chance of maximising returns on their investment,” non-executive chairman Russell Moran said.
“Strong interest in potential ‘project level’ funding for our advanced Cancet and Adina lithium projects has meant that MTC can afford to develop its cobalt and lithium assets.”
MetalsTech had around $2.1 million cash in the bank at the end of the December quarter and in February, Chinese battery maker Dynavolt Rewable Energy Technology pulled out of a $3 million investment.
However, the company subsequently received a $1.8 million cash injection from Chinese chemical producer Wuxi Baichuan Chemical Industry Co.
Mr Moran told Stockhead in February when MetalsTech announced the cobalt spin-out that the company had not been successful in increasing its market value as a dual-commodity “battery minerals” explorer.
Newly appointed managing director David Riekie told Stockhead last week that the decision to cancel the spin-out was largely due to the rising cobalt price and the prospectivity of the projects.
“The value metric that they came back with, and I couldn’t disagree with, is the fact that when they first looked at doing this some time ago, a lot of these prices for cobalt were substantially less,” he said.
The price of cobalt hit a decade-high of $US95,000 ($122,323) in March. It dipped back to $US87,500 in early April, but is edging back up and was last trading at around $US91,000.
MetalsTech expects to wrap up the acquisition of the Rusty Lake mine this week. The company is also looking a other low-cost opportunities in the cobalt space.