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As per todayâs ASX announcement, emerging vanadium explorer, Australian Vanadium Limited (ASX:AVL) announced the pre-feasibility study (PFS) results for its maiden ore reserve at 100% owned Gabanintha vanadium deposit in Western Australia. The PFS study evaluates the site as a high-grade base with strong economics, utilizing low-risk refining method to produce a vanadium pentoxide (V2O5) flake product.
The Gabanintha project is based on a proposed open pit mine with a production rate of 1.40% V2O5 magnetite concentrate at an average yield of 60%. Additionally, it involves the milling and refining plant for final processing and production of V205 with a production rate of approximately 22.5Mlb V2O5 per annum over an initial mine life of 17 years. The PFS highlights great potential for AVL to grow as an efficient and economic vanadium producer.Â
The PFS will gradually advance to Definitive Feasibility Study (DFS) in 2019 with further focus on optimization and further refinement.
Managing Director Vincent Algar stated that the company eyes great future as emerging low-cost, world-class vanadium producer with the maiden ore reserve at Gabanintha. Given the cyclical nature of the vanadium markets, it becomes imperative to evaluate all technical aspects as well as operating costs. Gabaninthaâs offers benefits of its geology, unique thickness and geometallurgy.
AVL is next planning to commence a diamond drill (DD) program to provide feed for pilot scale flowsheet validation test work and other DFS work packages. With the completion of PFS next year, robust global vanadium demand and traditional markets transitioning to higher quality steels, the company anticipates bright future for the Gabanintha vanadium project.
In its announcement, the company states current V2O5 price to be trading at US$22/lb (source: Fastmarkets) with anticipated ongoing supply shortfall until at least 2025.
Other major PFS aspects include:
- Average mass yield from the concentrator is estimated at the excellent level of 60% for entire mine lifespan as compared to other current operating vanadium operations
- Extracting an estimated 1,775 t/a mixed sulphide concentrate containing cobalt, nickel, and copper in another 3-16 years.
- Base metal sales account for approximately 1% of estimated total gross revenues over the project lifespan
- Operating costs are currently estimated at US$4.15/lb V2O5 making it a low-cost project to deal with vanadium cyclical business nature
- The initial capital costs of USD 354 million has been identified
As requested by Australian Vanadium, the securities of the company were placed on a trading halt by ASX on 17th December 2018. The securities resumed trading effective today, i.e. 19th December 2018 upon releasing prefeasibility study results for Gabanintha first ore reserve.
AVL shares closed at $0.024 on 19th December, down by 14.3%. The companyâs stock performance has been impressive this year with a YTD return of around 47% till date. However, the share price has declined by about 28% for a month.
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