One Small-cap Resource Stock of Interest - Australian Vanadium Limited (ASX: AVL)

  • Aug 16, 2018 AEST
  • Team Kalkine
One Small-cap Resource Stock of Interest - Australian Vanadium Limited (ASX: AVL)

Australian Vanadium Limited (ASX: AVL) is a metals and mining company with 100 per cent interest in key flagship project - Gabanintha Vanadium Project, within Western Australia. It also has a 100% owned subsidiary, VSUN Energy, which is focused on the development of the Vanadium Redox Flow Batteries. The stock currently trades at $ 0.054 after starting the year at 1.9 cents per share. AVL has been at nascent stages of its Gabanintha Project. The mineral resource base and metallurgical test results have been positive and provide support for the Pre-Feasibility Study (PFS), which has been underway by the group. Earlier this month, AVL announced that the PFS baseline model is near completion, pending major supplier cost inputs. Detailed option analysis will continue during 2018 and favorable outcomes will allow AVL to advance to a Definitive Feasibility Study. Furthermore, ACL will undertake a new drill program in 2018 to resolve key parameters required for successful and safe long-term open pit design.

Over the last few months, the market reacted positively to the signing of a Non-Binding Memorandum of Understanding (MOU) with the Win-Win Development Group and recovery of a sulphide concentrate containing cobalt, nickel and copper. Win-Win is a private Chinese steel and alloy producer, interested in the offtake of vanadium oxides to be used in the production of vanadium carbon nitride (VCN). Its interest is driven by the new Chinese rebar standard, which requires additional use of vanadium, with local supplies constrained. AVL’s management was also encouraged by the successful recovery of cobalt, nickel and copper in a sulphide concentrate at Gabanintha. Cobalt is widely used in batteries, and with its pricing at all-time highs, and this could potentially prove to be an important revenue stream. Bryah Resources Limited (BYH) holds the rights to any nickel, copper and gold recovered, but AVL is still positioned to benefit from this development due to its 14% holding in BYH.

In last one year, the stock of AVL surged by 315.4% but saw a price dip by 14.3% in last five days, as at August 15, 2018. This small-cap resource player with a market capitalization of $ 87.23 million and earnings per share of -0.001 AUD is still under investors’ purview. Further, with AVL’s continuous efforts and planned commencement of drilling at key project in the month of August depending on rig availability is being viewed crucial to the progress on exploration activities.

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