Is King River setting an attractive investment theme through its Growth Strategy?

  • Apr 05, 2019 AEDT
  • Team Kalkine
Is King River setting an attractive investment theme through its Growth Strategy?

Vanadium dominant King River Resources Limited (ASX: KRR) gets applauded for its fast-track development plans to produce highly lucrative products like high purity alumina, vanadium pentoxide, titanium dioxide and iron oxide among others.

The stock spiked up by 7.692% in mid-day trade and finally closed at $0.027, up by 3.85% on 5 April 2019.

It seems the investors are putting their pedal on King River’s 100% owned Speewah Specialty Metals Project, located in the Eastern Kimberley of Western Australia. The company has reported significant progress in the project with continued testwork and studies on Vanadium, Titanium and Iron that have the potential to reduce costs.

King River has received positive results from Heated Agitated Tank Leach and Heated Flooded Vat Leach testwork on magnetite-ilmenite concentrate and coarse lump material that have delivered Vanadium leach extraction to 97% after 3 days in agitated leach and 90% after 14 days in vats.

The testwork and studies are still ongoing to deliver a Prefeasibility Study towards the third quarter of 2019 as planned.

Perth-based Como Engineers have been recruited by the Group to compile Scoping Study level at ±30% accuracy, Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) estimates for the Processing Facility and the Acid Contact and Regeneration Plants.

The Group believes that it would not be relevant to disclose any production targets and detailed financial information at this early stage of its ongoing PFS process. It, therefore, retracted the previously announced estimates relating to operating expenditure of A$46.44 /tonne mined and installed leach circuit capacity that was estimated to up to 1,600,000 tonne concentrate per year.

Vanadium undoubtedly is one of the most demanded products for its extensive use in the steel industry. The global supply of vanadium pentoxide, V2O5, the essential economic mineral form, is in deficit compared to its escalating market demand. To seize this underlying opportunity, King River has been ramping up its new development plan for the SSM project to produce vanadium pentoxide.

King River Resources aims to produce at least 5 high purity metal products, including high purity alumina, vanadium pentoxide, titanium dioxide and iron oxide. The Group further focuses on deriving benefits from the secondary multi-commodity exposure opportunity for prospective gold and base metal commodities.

Its recent studies have demonstrated that Agitated Tank Leach option is the lower cost scenario which resulted in Processing Facility and Acid Plants’ initial CAPEX estimates of A$359 Million and A$580 million, respectively. These initial estimates for CAPEX are well below the company’s initial target of US$650-750 million for a three commodity project-vanadium pentoxide, titanium dioxide and iron oxide products.

KRR’s gold footprints are also expanding as final gold drill assays from exploration completed in 2018 at Mt Remarkable returned more high-grade gold intersections to the east and below the main Trudi grid where visible gold was noted from panning of the drill piles.

The investors are eyeing the stock amidst the scenario wherein the Group is further expecting some of its application licenses to be granted this year, opening exploration opportunities along 200km of under-explored Whitewater Volcanics for new high-grade gold deposits.


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