Hardey Resources Ltd (ASX:HDY) believes its proposal to reopen the Nelly Vanadium Mine in San Luis Province of Argentina can be fast-tracked owing to the country’s mining laws.
The company’s ongoing due diligence process in acquiring the mine has revealed a number of regulatory and operational comparative advantages.
These include the ability to expedite the monetising of legacy stockpiles as a direct shipping ore vanadium product then, if a JORC-compliant resource is modelled, recommence mining.
READ: Hardey Resources to acquire Nelly vanadium mine in Argentina
Typically, establishing a mining platform from a prospective area in most jurisdictions takes up to five years, numerous studies and material capex.
However, under Argentina’s laws, the process to reactivate a mining licence is relatively straightforward and fast.
“A comparative advantage”
Executive chairman Terence Clee said: “One of the attractive and unique features with Nelly Vanadium Mine is the potential to fast-track the commencement of mining operations and cashflow.
“This is a material comparative advantage over building up a resource from inception, which can take many years.
“The board is increasingly optimistic about the forward prospects for vanadium and is not averse to building a global footprint to meet growing demand, especially from China.”
Hardey’s geology team is scheduling meetings with the directors of San Luis’ mining and
environmental departments, so they can meet key decision makers and fast-track reactivating the mining licence.
Potential to monetise stockpiles
The ability to rapidly reactivate the licence will facilitate the potential to monetise legacy stockpiles around the historical workings and generate early cashflow.
Operationally, with a high-grade prospective ore grade historically averaging 0.82% vanadium pentoxide, the company believes Nelly can potentially be a primary low-cost producer.
When Nelly was operating from 1949-57 only one vein was partially exploited, leaving most of the deposit intact.
Over the longer-term, Hardey’s goal is to replicate the low-cost production structure achieved by Largo Resources’ (TSX:LGO) at the Maracás Menchen Mine in Brazil.