Australian Vanadium Ltd (ASX:AVL) has received strong support in its rights issue, raising over $1.6 million at $0.013.
The proceeds will be used to fund AVL’s vanadium battery market development and sales, as well as a feasibility study for an AVL electrolyte plant.
The company’s vision is to create value for shareholders by supplying its high-grade product to battery makers worldwide – a market which is expected to grow significantly on the back of increased renewable energy generation.
Therefore the company has a vertical integration strategy, using vanadium from the mine face through to the battery application.
Gabanintha
Funds will also focus on the next stages of evaluation at the company's rapidly emerging Gabanintha vanadium project near Meekatharra in Western Australia, and for general working capital.
At Gabanintha, studies are expected to commence in Q2 2016.
Gabanintha is currently one of the highest-grade vanadium projects being advanced globally with Measured, Indicated and Inferred Resources of 91.4 million tonnes at 0.82% vanadium.
It also contains a discrete high-grade zone of 56.8 million tonnes at 1.0% vanadium.
Additional details of rights issue
CPS provided a partial underwriting.
A shortfall can also be placed in the next three months at the discretion of the board.
Analysis
AVL has been making significant strides in its vertical integration strategy, and this raising will help the company with vanadium battery market development and sales.
The company has recently signed some significant agreements, including with Gildemeister Energy Storage to sell the CellCube range of Vanadium Redox Flow Batteries (VRFB) in Australia.
This follows agreements with Sun Connect Pty Ltd.
AVL is therefore positioned as a front-runner to benefit from the positive signs of growth in vanadium demand as it applies to the energy storage market.
The company's Gabanintha Project will allow it to supply high-quality vanadium products to electrolyte producers worldwide, as well as its own plant planned for Australia.
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