Iluka Resources has concluded an investment agreement with the private UK-based Metalysis Limited for an interest of 18.3 per cent of the company.
Metalysis has demonstrated that it is able to produce titanium powder directly from Iluka’s main high grade titanium feedstock products of rutile.
Iluka’s managing director David Robb says: “Iluka’s involvement as a major shareholder and funding partner provides Iluka shareholders with access to a new, potentially disruptive technology which is close to commercialisation, and the potential benefits of a new source of high grade titanium dioxide feedstock demand, as well as a commercial involvement in a potential new growth pathway for high value metals and alloys and new manufacturing processes such as 3D printing.”
Metalysis chairman Tony Pedder says: “Iluka coming in as a funding partner to Metalysis is an important part of the company’s journey. Iluka’s expertise in titanium dioxide as a feedstock, process engineering experience and access to global markets can make a significant impact on Metalysis’ development. The Metalysis process has applications across metals in the periodic table including: titanium, tantalum and rare earths and with Iluka’s access to titanium dioxide feedstock there is the potential to produce titanium powder with much greater efficiency and at a much lower cost than is currently possible.”
For a consideration of GBP12.2m (approximately AUD22.5m), Iluka’s investment in Metalysis provides the following:
• A 18.3 per cent interest, on a fully diluted basis (19.6 per cent on an undiluted basis), which would make Iluka the largest shareholder;
• A right to increase its shareholding to between 20 to 24.9 per cent in the event of an initial public offering;
• A pro-rata first right of refusal over any transfers of existing shares or issues of new shares;
• One board seat – with full voting rights and one observer;
• A non-exclusive world-wide licence over the Metalysis technology to produce titanium powder in return for a revenue royalty on normal commercial terms; and
• Right of first offer over future titanium metal licences, excluding current negotiations the company is undertaking with respect to two specific licences.
In addition, Iluka and Metalysis have entered into a term sheet outlining technical services and titanium dioxide feedstock supply agreements.
