Critical Minerals Group Details AUD$1.29 Billion Capital and Operating Costs for Lindfield Vanadium Project

Capital Allocation for Mine and Processing Development

In its recent update, Critical Minerals Group detailed the capital allocation across Lindfield Project’s key components. The AUD$981 million initial capital expenditure covers full development costs to initiate operations, including establishing the Lindfield mine, processing facilities, vanadium electrolyte manufacturing plant, non-process infrastructure, indirect costs, and contingencies. This capital structure reflects the project’s integrated approach, combining mining with downstream processing.

The processing plant and beneficiation infrastructure receive the largest initial capital allocation of AUD$576 million, increasing to AUD$776 million life-of-mine with AUD$200 million in sustaining capital. The on-site sulphuric acid plant, critical for hydrometallurgical extraction, requires AUD$192 million initially and AUD$45 million sustaining capital, totaling AUD$237 million. The vanadium electrolyte facility, designed for 72 megaliters per annum capacity, demands AUD$164 million initial capital plus AUD$46 million sustaining capital. Non-process infrastructure, including mine facilities, roads, dams, utilities, storage, and accommodation, is budgeted at AUD$49 million initially and AUD$15 million sustaining, totaling AUD$64 million.

Operating Cost Variability Linked to Ore Grade Changes

CMG disclosed that operating costs fluctuate over the project life due to sequential mining of mineralised horizons with varying ore grades. For 2033, representing steady-state operations, operating costs are estimated at AUD$74.96 per feed tonne of economically mineable material, equivalent to USD$6.16 per pound of vanadium pentoxide. This reflects mining across three main mineralised units—TLBA, TLBB, and TLBD—each with distinct grades and processing needs. Operating costs vary in line with ore grade changes throughout the mine plan.

Reagents constitute the largest operating expense at AUD$58.34 per feed tonne, about 77.8% of total operating costs excluding royalties and government charges. Mining costs are AUD$3.35 per feed tonne, processing fixed costs AUD$4.68, and combined power and water costs AUD$3.62 per feed tonne. Logistics, labour, overheads, and contractor margins make up the remainder. Operating costs range from USD$5.90 per pound of vanadium pentoxide in early years to USD$8.70 per pound as ore grades decline later. Royalties add AUD$2.17 per feed tonne, equating to AUD$588 per tonne of vanadium pentoxide or USD$0.18 per pound.

Sustaining Capital Over 31-Year Operational Life

Critical Minerals Group identified sustaining capital needs of AUD$306 million over the 31-year mine life to support equipment replacement, process upgrades, and maintenance. Sustaining capital is estimated at 1.0% to 1.5% of equipment replacement value annually, ensuring operational continuity.

The processing plant accounts for AUD$200 million of sustaining capital, reflecting its vital role. The sulphuric acid plant requires AUD$45 million, the vanadium electrolyte facility AUD$46 million, and non-process infrastructure AUD$15 million for ongoing maintenance. Combined with the AUD$981 million initial capital, total life-of-mine capital expenditure reaches AUD$1,287 million, covering all development and operational phases.

Robust Mineral Resource Base Supporting Long-Term Economics

The Lindfield Project’s mineral resource totals 713 million tonnes grading 0.32% vanadium pentoxide, comprising 491 million tonnes Indicated at 0.32% and 222 million tonnes Inferred at 0.31%. This estimate was updated on 10 May 2024 following a recent drilling campaign that significantly increased resource size.

The resource is distributed across three horizons: TLBA with 259 million tonnes Indicated at 0.22% and 120 million tonnes Inferred at 0.23% (378 million tonnes at 0.22%), TLBB as the highest grade with 152 million tonnes Indicated at 0.48% and 63 million tonnes Inferred at 0.45% (214 million tonnes at 0.47%), and TLBD with 80 million tonnes Indicated at 0.33% and 40 million tonnes Inferred at 0.35% (120 million tonnes at 0.34%). This stratification informs mine sequencing and cost variability.

Integrated Mining and Electrolyte Manufacturing Model

The Lindfield Project combines primary vanadium extraction at the Queensland mine with downstream vanadium electrolyte production at Parkes in New South Wales, delivering vertical integration. The electrolyte facility is designed for 72 megaliters per annum capacity, supporting a 3 million tonne per annum processing rate.

This integrated structure enables CMG to optimise operations across mining, processing, and manufacturing, capturing value from both raw material processing and refined product sales. The vanadium electrolyte is a key intermediate for energy storage, especially vanadium redox flow batteries. The AUD$164 million initial and AUD$46 million sustaining capital investment in the electrolyte plant underscores its strategic importance, differentiating CMG from miners supplying concentrate to third parties.

Operating Cost Drivers Highlight Reagent Intensity

Reagents dominate operating expenses at AUD$58.34 per feed tonne, about 77.8% of operating costs excluding royalties, equating to AUD$15,773 per tonne of vanadium pentoxide or USD$4.79 per pound. This reflects the hydrometallurgical process requiring chemicals for leaching, precipitation, and refining.

Power costs are AUD$3.43 per feed tonne (AUD$928 per tonne vanadium pentoxide), roughly 4.6% of costs. Mining and haulage total AUD$3.35 per feed tonne (4.5%), labour AUD$1.72 per feed tonne (AUD$465 per tonne vanadium pentoxide), and processing fixed costs AUD$4.68 per feed tonne. Efficient reagent use and processing are critical to profitability amid ore grade changes.

Qualified Competent Persons Validate Technical Assessments

CMG engaged qualified competent persons to ensure compliance with industry standards. Pat Kelly, CMG’s Chief Operating Officer and Member of the Australasian Institute of Mining and Metallurgy, is responsible for mine planning and scheduling. Adrian Buck, Principal Geologist at Measured Group and also a member of the Australasian Institute of Mining and Metallurgy, oversaw the mineral resource estimates. The resource estimates comply with the 2012 Australasian Code for Reporting Exploration Results, Mineral Resources, and Ore Reserves. Both have consented to the inclusion of their findings, and CMG confirmed no material changes to previously reported resource estimates.

Capital Estimates Include 10% Contingency for Pre-Feasibility Stage

The AUD$981 million initial capital includes a 10% contingency to address uncertainties in technical, scheduling, and cost estimations typical at the pre-feasibility stage. This contingency aligns with industry norms anticipating accuracy within ±25-30%. The capital cost scope covers direct construction and equipment costs, indirect engineering and management expenses, and owner’s costs for project oversight. Total life-of-mine capital of AUD$1,287 million encompasses all development, operational, and maintenance expenditures over 31 years. Investors should expect refinement of these estimates as the project advances through feasibility and engineering phases.

Vanadium Market and Energy Storage Demand Context

The Lindfield Project is poised to significantly augment global vanadium supply, meeting rising demand for vanadium pentoxide used in vanadium redox flow batteries (VRFBs) for grid-scale and long-duration energy storage. VRFBs are gaining traction for renewable energy integration and grid stability amid increasing renewable penetration. The Parkes electrolyte facility enhances CMG’s strategy by enabling direct supply of refined electrolyte to battery manufacturers and energy storage operators.

CMG’s capital and cost framework reflects evolving energy storage markets and vanadium supply dynamics. The 31-year mine life aligns with sustained demand for vanadium chemicals in energy storage. Project economics depend on vanadium pricing, energy and labour costs, and regulatory environments in Queensland and New South Wales. Investors should monitor macroeconomic trends affecting energy storage adoption, vanadium market prices, and battery technology developments impacting long-term demand.