MELBOURNE: Sunrise Energy Metals Limited (ASX:SRL) CEO, Mr Sam Riggall announced that Sunrise Energy Metals has reached agreement with Ionic Industries Limited to move to full ownership of the Company’s graphene oxide membrane development joint venture company NematiQ Pty Ltd.

 Under the terms of the agreement, Sunrise Energy Metals will acquire the remaining 16.8% (116,667 shares) of NematiQ that it does not currently own as well as the shareholder loan of $340,000 owed by NematiQ to Ionic.

As part of the asset swap, the Company will issue to Ionic 740,741 fully paid ordinary shares of Sunrise Energy Metals.

Ionic has agreed to a voluntary escrow of the Sunrise Energy Metals shares (and any shares in Clean TeQ Water Limited which it may receive pursuant to the proposed demerger of the Company’s Water Business) until 30 September 2021.

In late 2018, Sunrise Energy Metals and Ionic established NematiQ to pursue in partnership the development of graphene oxide (‘GO’) membranes for water treatment applications. NematiQ has developed a process to manufacture GO that can be applied to a membrane support to create a graphene oxide based nanofiltration membrane (‘GO-Membrane’).

Significantly, the GO-Membrane manufacturing process has been demonstrated on commercial scale industrial equipment.

NematiQ was initially established as an incorporated joint venture between Sunrise Energy Metals (75%) and Ionic Industries (25%). Throughout 2020 the Company’s equity interest in NematiQ increased to 83.2% as a result of the Company making a number of funding contributions to NematiQ in addition to its existing obligations under the joint venture agreement.

The Company has now agreed to acquire Ionic’s remaining 16.8% equity interest in NematiQ (and the shareholder loan of $340,000 owed by NematiQ to Ionic) for approximately $2 million worth of shares in Sunrise Energy Metals. As such, NematiQ Pty Ltd will become a wholly owned subsidiary of Associated Water Pty Ltd, a Sunrise Energy Metals company.

Moving to full ownership of NematiQ will allow the Company to take full control of the GO-Membrane development work programs, budgets and testwork facilities while providing Ionic with ongoing exposure to the GO technology and the broader Sunrise Energy Metals portfolio.

Sunrise Energy Metals is currently progressing a range of activities in anticipation of seeking shareholder approval for a demerger of the Company’s Water Business at a meeting to be scheduled in Q2 CY2021 with a target demerger implementation date of Q3 CY2021.

The demerger is proposed to be undertaken via a spin out of the Water Business by way of a capital return comprising a pro-rata in-specie distribution of shares in Clean TeQ Water Limited to Sunrise Energy Metals shareholders.

A separate shareholder meeting will be held at a later date to seek approval for the proposed demerger, with an explanatory memorandum setting out detailed information on the proposed demerger to be provided to shareholders in advance of that meeting.

If the demerger proceeds, NematiQ will be part of the demerged Water Business within the Clean TeQ Water Limited group of companies.