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Ferro-Alloy Resources pushes ahead with Balasausqandiq development plans

Snapshot

  • Developing low-cost vanadium project in Kazakhstan
  • Vanadium used in steelmaking and manufacturing
  • Reserve summary estimates 70mln tonnes available
Ferro-Alloy Resources Group - Ferro-Alloy Resources pushes ahead with Balasausqandiq development plans

Quick facts: Ferro-Alloy Resources Group

Price: 9.5 GBX

LSE:FAR
Market: LSE
Market Cap: £29.73 m
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What it does

Ferro-Alloy Resources Limited (LON:FAR) is a Kazakhstan-focused company working on the development of the Balasausqandiq vanadium deposit in the south of the country.

The company also has small scale production from a pilot plant there.

anadium is an element that has a wide range of application in the manufacture of metal alloys and is often used to increase the strength of steel for use in surgical tools, jet engines and dental implants.What it owns

Balasausqandiq

Ferro is the 100% owner of the Balasausqandiq vanadium deposit that also contains by-products such as uranium, molybdenum, aluminium, rare earth metals and carbon.

A reserve summary carried out in 2014 by the Kazakh State Reserves Committee confirmed a reserve at the site of more than 70mln tonnes, although Ferro said this assessment is only based on partial drilling and does not reflect the extent of the deposit.

The company says that the deposit is unlike the vast majority of vanadium deposits elsewhere in the world as it is not comprised of the mineral vanadiferous titano-magnetite, meaning material from the site can be processed with much lower capital and operating costs.

Ferro estimates that Balasausqandiq is large enough to produce around 10mln tonnes of ore per year, generating around 55,000 tonnes of vanadium pentoxide.

Processing plant

Aside from its developments at Balasausqandiq, the company also operates a processing plant treating low-grade bought-in concentrates with a production capability of around 150 tonnes per year of vanadium pentoxide.

The company is planning to increase output at the plant to around 1,500 tonnes per year by “by further debottlenecking the plant and installing additional equipment”, the cash from which it intends to use to fund the development of the Balasausqandiq deposit.

What's the latest?

Ferro-Alloy topped up its finances in June with a listing of bonds on the Astana stock exchange, after having raised £250,000 through the issue of new equity in May.

Significant progress has now been made towards a major expansion of the existing processing operation, with the new equipment installed increasing capacity to 60 tonnes of vanadium pentoxide per month.

The company has now completed preparatory work on a second major phase of expansion, planned to take capacity up to some 1,500 tonnes per year.

Separately, Ferro Alloy is also upgrading the feasibility study on the Balasausqandiq vanadium project, which has an NPV of US$2bn at a long-term forecast vanadium pentoxide price of US$7.50 per pound.

And production has now recommenced on the hydrometallurgical process on 1 June 2020 which, in spite of some continuing coronavirus restrictions, has resulted in a significant increase in production to a monthly rate nearly three times that of the first quarter of 2019.

From the chief executive

Nick Bridgen, CEO, commented: "The issue of the bonds on these terms is a big vote of confidence in the Company. With increasing production from both the hydrometallurgical and pyrometallurgical production facilities, we have a firm base which will let us focus on the remaining expansion plans and the upgrade of the feasibility study."

 

Video Interview

Inflexion points

  • Developing low-cost vanadium project
  • In financing discussions to fund development plans
  • Has completed extension of vanadium processing plant

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Ferro-Alloy Resources raises US$300k and reports 'significant production'...

Ferro-Alloy Resources Limited's (LON:FAR) Nick Bridgen speaks to Proactive London's Andrew Scott soon after announcing they've raised US$300,000 through a bond issue on the Astana Stock Exchange in Kazakhstan. He adds that production from the hydrometallurgical process was restarted on June...

on 16/6/20

3 min read