Australian Vanadium Ltd (ASX:AVL) says its bankable feasibility study (BFS) confirms the Australian Vanadium Project as a potential globally significant primary vanadium producer targeting critical mineral, steel and energy storage markets.
The company says the BFS results reflect the Australian Vanadium Project’s value as a critical and battery mineral project and provides a strong commercial case for development.
“All Australians now stakeholders in our work”
AVL has been awarded an Australian Government grant of A$49 million under the Modern Manufacturing Initiative (MMI) Collaboration Stream to support the Western Australian project to production.
“The award of the A$49 million MMI grant provides further vindication of the importance and relevance of the Australian Vanadium Project and we acknowledge the responsibility placed upon us, as all Australians are now stakeholders in our work,” managing director Vincent Algar said.
The project consists of 15 tenements covering 200 square kilometres and is based on a proposed open cut mine of the Vanadium Titanium Magnetite orebody, a crushing, milling and beneficiation (CMB) plant and a vanadium processing plant.
Concentrate produced at the CMB will be transported to a vanadium processing plant near Geraldton for final conversion to high-quality vanadium pentoxide.
From there, it can be sold or further converted for use in steel and energy storage, catalyst, chemical and defence applications.
Strong global demand
The global critical mineral vanadium market is seeing strong growth in demand and pricing (currently more than US$12 per pound V2O5), with the battery sector showing accelerated uptake in vanadium redox flow batteries.
Algar said, “The high standard of feasibility study that the AVL team and its consultants have completed is a significant milestone for the company.
“The positive economic results of the study have occurred in an environment of global inflationary pressure, COVID-19 related impacts and geopolitical instability. We have attempted to accommodate potential areas of challenge by building them into our assumptions and remaining agile when efficiency opportunities present.”
Extensive piloting test-work
Technical studies are now complete, which wraps up three years of extensive piloting test-work, supporting robust processing flowsheets and de-risking the project towards funding and delivery.
The project sports a pre-tax net present value (NPV7.5) of A$833 million and equity internal rate of return (IRR) of 20.6% based on a V2O5 price of US$10.50 per pound and A$604 million upfront pre-production capital excluding contingency.
The BFS includes an updated ore reserve of 30.9 million tonnes at 1.09% V2O5 (vanadium pentoxide), which is comprised of a proved reserve of 10.5 million tonnes at 1.11% V2O5 and a probable reserve of 20.4 million tonnes at 1.07% V2O5.
The company has factored in an anticipated initial mine life of 25 years, supporting a long-life, consistent ore feed operation on AVL’s granted mining lease.
AVL is targeting average annual vanadium production of 24.7 million pounds V2O5 (11,200 tonnes) as a 99.5% V2O5 high purity flake and 900,000 dry tonnes per annum of iron titanium (FeTi) co-product.
The strategic separation of processing plant from mine site and concentrator allows access to competitive natural gas near Geraldton, local workforce and FeTi co-product sales opportunities through the Port of Geraldton.
An Innovative process flowsheet recovers 90% of vanadium in concentrate, using tried-and-tested grate kiln technology, with valuable reductions in gas consumption and CO2 emissions.
All approvals are well advanced and Environmental, Social and Governance (ESG) standards and action plans are in place.
“We are in a period of growing demand for vanadium from both steel and energy storage markets. The robust designs and financials presented in this work firm the pathway to new vanadium production and set the project apart as the most advanced new primary vanadium project globally,” said Algar.
“The thorough study process has reduced risks and therefore increased confidence for parties looking to invest in the future of vanadium from a stable mining region. The company is now in a position to progress through funding, final engineering, procurement, construction and into production.”
Watch: Australian Vanadium riding high on battery minerals as it releases bankable feasibility study