Sooooo..... NMT just sold their only income generating asset.......

Sooooo..... NMT just sold their only income generating asset.... and my knee jerk first thought is "for less than what its worth".  But let me think this through for a bit.

The first point to address is that the retention of the offtake from the mine is quite a nice plus and because the offtake was always going to have to be paid for - by selling their % of mt marion they basically converted their profit margin for the product of their share of Mt Marion for a cash payment today. If we can very roughly assume that profit from the 13.8% in question equates to roughly $25mil per year (very roughly) we are looking at 4 years profit up front.  Arguably not a horrible decision given that there is some schools of thought suggesting lower longer term profitability behind hard rock lithium mining compared to brine operations.  So yes I can see this as a "safe" hedge against future market conditions.

As they say "cash is king" right? Well, yes.. but Neo really needs to put this cash to use in terms of transfering it into an existing project in order to generate it into an income producing asset.


I don't think anyone was under any illision that any of Neo's metalurgy or recycling technologies were anywhere near income producing.  Having said that I think the company has really implied that Barrambie is in fact ready to start producing cash. This money really needs to be directly put towards making this happen, along with the development of the KLR (Kalgoorlie Lithium Refinery)

Honestly I'd like to think the Reed's (Chris specifically) has the ability and the genuine desire to make these projects happen.  Unfortunately the previous 4 dividend payments; focus on spliting the company as well as the constant timeline blowouts, does make me question not so much the motivation, but perhards the focus and maybe even the ability of this management team to make anything else happen.

I genuinely felt that the company's assets; previous experience and cash on hand when compared to the market cap made this a firm BUY reccomendation from me, but in light of this recent announcement I'm feeling my sentiment is now firmly in the HOLD territory.  In lieu of  this I still fell theire is a good chance of success here but we have now lost our one stable income producing asset that was already so undervalued.  Perhaps now we know why it wasnt fully priced in? but I can't complain about that - Neo did announce over a year ago their itent to sell their 13.8% share.

Anyway good luck to all holders just wanted to get all that off my chest- hopefully it'll give some other holders something to think about as well : )