Today, on 13th May 2019, Australian Vanadium Limited (ASX: AVL) announced that it has entered into a Joint Venture with Ultra Power Systems (UPS) to develop the Coates Vanadium Project. Ultra Power Systems is energy storage technology and vertically integrated electrochemical processing company. It will evaluate AVL’s Coates Vanadium Project with an aim to produce vanadium electrolyte using a combination of a unique processing route and high-density vanadium electrolyte production.
AVL via this JV wishes to create value for shareholders by monetising a secondary asset, and testing processing technology focused on enhancing the uptake of vanadium redox flow batteries in Australia. It will receive either $0.5 million or equivalent shares in Ultra Power Systems. As per the agreement, Ultra Power Systems has the exclusive right to earn a 49% legal and beneficial interest in the tenement on a $5,000 signing fee, followed by $50,000 being spent on exploration on the tenement within the first 12 months of the agreement and $150,000 being spent during the first 24 months. Following the fulfilment of the required obligations, Ultra Power Systems has the right to acquire AVL’s Joint Venture interest for a sum of $500,000 or shares in UPS, at the election of AVL.
Coates Vanadium Project:
The Coates Vanadium Project lies around 35 kilometre east of the Perth metropolitan area in the Shire of Wundowie.
The unique landscape of the Coates Vanadium deposit shows that Vanadiferous Magnetite develops in the weathering profile (under the breakdown of rocks at the earth's surface) of an underlying gabbro in a laterite outcrop on a ridge, which is about 1 kilometer long and up to 600 meter wide. Previous metallurgical test results indicate that a 58% recovery of Vanadium at an approximate grade of 1.4% V2O5, 3% TiO2, 67% Fe grade with 8% SiO2 is achievable from an ore assaying 0.54% V2O5, 4.75% TiO2, 25% Fe and 29% SiO2.
Vincent Algar, Managing Director of Australian Vanadium, has stated that the proximity of the deposit to the Perth will enable the testing of both the VanadiumCorp Electrochem Processing Technology (VEPT) process and production of generation three electrolyte at a relatively low cost. The company is excited about the new relationship with Ultra Power Systems and expects to synergise the upcoming developments in the vanadium industry in Western Australia.
In its quarterly Cash-flows from operating activities (ended on March 31, 2019), it reported payments for exploration & evaluation at $1.95 Mn. It reported cash and cash equivalents at $7.34 Mn for the period.
On the stock information front, at market close on 13 May 2019, the stock of Australian Vanadium was trading at $0.021, up 16.667% with a market capitalisation of $35.53 million. Today, it touched day’s high at $0.023 and day’s low at $0.019, with a daily volume of 20,639,492. Its 52 weeks high and low price stands at $0.070 and $0.018, with an average volume of 2,701,393. Its absolute returns for the past one year, six months and three months are -58.14%, -55.00%, and -25.00%, respectively.
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