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On 11 March 2020, Subiaco-based mineral explorer & developer, Technology Metals Australia Limited (ASX:TMT) released half yearly report for the six-month period ended 31 December 2019.
During the concerned period, the Company continued activities advancing the development of its flagship property, Gabanintha Vanadium Project (GVP), a high-grade, low-cost, large-scale, long-life operation. GVP located ~40km south of Meekathara, Western Australia, on development, is expected to become the world’s largest single primary vanadium producer. The project also includes a gas pipeline (by a 3rd party), accommodation infrastructure, and power and processing plants.
Interesting Read: Technology Metals Developing World’s Largest Primary Vanadium Project - Gabanintha
First Half GVP Activities – DFS Completed
TMT completed a very high-quality definitive feasibility study (DFS) into the project, based on the Northern Block of tenements, during the period.
As highlighted by DFS, the project has the ability to produce +99% high purity vanadium product, amenable for the premium vanadium market, supplying vanadium nitrogen alloys and battery products at the lowest quartile life of mine cash costs of US$4.04/lb V2O5, compared favourably to global producers.
GVP has an initial life of ~16 years with extensive opportunities for extending the mine life with an average vanadium production of 27.9 Mlb V2O5 at a low operating cost of US$4.04/lb V2O5.
Technology Metals on the Offtake Road
For the project, the Company has been in ongoing discussions with offtake partners, possible equipment vendors and suppliers and other prospects for strategic partnerships and fundraisings during the first half of FY20.
As a result of these activities, Technology Metals has signed offtake MoUs with two major corporations to supply almost 40% of the annual average production or 5,000 tonnes per year from the Gabanintha Vanadium Project in the following manner-
- 2,000 tonnes per year V2O5 to CNMC (Ningxia) Orient Group Co., Ltd.
- 3,000 tonnes per year V2O5 to Shaanxi Fengyuan Vanadium Technology Development Co., Ltd.
The Company is progressing with the execution of MOUs to binding offtake agreements with these offtake partners, also amongst China’s largest vanadium nitrogen alloy producers.
NAIF Assessment to Facilitate GVP Development
In the December 2019 quarter, Technology Metals progressed on engagement with the Northern Australia Infrastructure Facility (NAIF) to due diligence stage of assessment process of the $5 billion facility, which grants loans at concessional rates for the development of infrastructure projects in Northern Australia.
TMT’s progress on offtake agreements, environmental approvals and GVP development metrics would possibly conclude with a formal investment proposal, a prerequisite for the NAIF Board to make an investment decision.
Natural Gas Pipeline Construction Project
Natural gas, the proposed heating energy and electricity source to the roasting kiln, is to be secured through a natural gas pipeline from the Dampier Bunbury Natural gas Pipeline, owned and operated by the Australian Gas Infrastructure Group (AGIG).
The Company has reached a memorandum of understanding with AGIG-owned DDG Operations Pty Limited to co-operate in a FEED (Front End Engineering Design) study for the pipeline construction project.
FLSmidth to Explore Process Plant Equipment
TMT is also engaged in talks with industry leading kiln supplier FLSmidth Inc to explore further the process plant equipment supply for the project. FLSmidth had earlier completed the critical risk reducing pilot scale kiln roast test work for the GVP DFS.
Subsequent to the half year period, the Company completed a fully paid ordinary share placement to raise ~$2.08 million before costs to support the project development. Additionally, the project secured Lead Agency Support from the state government of Western Australia.
To know more about what does Lead Agency Support mean, click here.
Technology Metals is undergoing financing talks while progressing on the environmental and permitting process. GVP, which has gained support from the WA government, holds the potential to evolve as a low-cost, high-purity, long-life vanadium asset with the ability to emerge as the world’s largest primary vanadium producer.
Interesting Read: Gabanintha Vanadium Project - Technology Metals’ Shining Armour
Stock Information - On 11 March 2020, the TMT stock closed the day’s trade at $0.080, up 1.266% from its previous close, with a market cap of $8.45 million.
