QEM Releases Investor Presentation Outlining the Dual Commodity opportunity at Julia Creek

  • September 04, 2020 03:02 PM AEST
  • Team Kalkine
QEM Releases Investor Presentation Outlining the Dual Commodity opportunity at Julia Creek

Summary

  • QEM is the only company in the world currently in a position to have a vanadium/oil combination project, with the diversification of two commodities in its Julia Creek Project mitigating several key risks associated with a resources project development.
  • Australia government considers vanadium as a “Critical Mineral” and seeks to prioritise the development of these projects. QEM’s Julia Creek Project fits well with the Federal Government’s Critical Minerals Strategy 2019
  • Experienced management team with significant ‘skin in the game’ pivots Julia Creek for a successful path to development

QEM Limited (ASX:QEM) released an investor presentation titled “QEM Limited, Dual Commodity Opportunity” highlighting the progress and substantial strategic opportunities at the flagship Julia Creek Vanadium and Oil Shale project in North Western Queensland.

Recently the Company published excellent extraction test results for both vanadium and oil from the same ore body and a pre-feasibility study decision on the Julia Creek Project is anticipated later this year.

Dual Commodity Opportunity: Vanadium and Shale Oil

QEM envisions to emerge as a major supplier of the trending “new economy mineral” vanadium, along with the potential to provide quality liquid fuels for the domestic market.

Innovative dual commodity opportunity at Julia Creek Project; Image Source: Kalkine

Innovative dual commodity opportunity at Julia Creek Project; Image Source: Kalkine

Here is a snapshot of the project on several important parameters-

Tier 1 Mining Jurisdiction with excellent Infrastructure: The wholly owned Julia Creek project stretches across 4 exploration tenements namely, EPM25681, EPM26429, EPM25662, and EPM27057 covering 249.6 square kilometres in the prospective neighbourhood of North Western Queensland.

The project site is situated in the stable mining environment with direct access to all infrastructure, including rail and road to the Port of Townsville. Further, the region is currently trending amongst investors and mining players as the Queensland government proposes mega infrastructure projects in the region such as -

  • New container terminal at the port of Townville ($30 million project)
  • Qld Government plans to reduce the freight charges on the Mount Isa line ($80 million project)
  • Proposed new federal government resource corridor which encompasses QEM’s Project
  • Proposed CopperString 2.0 Project to provide cheap power to the North West Minerals Province. The CopperString 2.0 project has released a report that states there are $680 billion of known in-ground resources in north-west Queensland (Source: CopperString 2.0)

Julia Creek Project and Federal Governments Priority Resource Corridor.   Source: QEM Limited

Julia Creek Project and Federal Governments Priority Resource Corridor. Source: QEM Limited

Innovative Dual Commodity opportunity: Vanadium is considered as a strategic metal along with Lithium and other rare earth minerals, in building a” new energy economy”. These new economy minerals enjoy particular support from both federal and state governments, with a special emphasis to prioritise development and investment for such projects.

With vanadium pentoxide being the most crucial component for the Vanadium Redox Flow Batteries, it is considered as the best solution for large scale energy storage, with over 113 installs worldwide, equating to 209,800 kWh of available energy.

Vanadium global demand is conservatively anticipated to rise to around 5% to 133,000 tonnes in 2025 or 202,000t V2O5 equivalent.

Vanadium Demand and Supply Source: Vanitec, QEM Investor Presentation 2 September 2020

Vanadium Demand and Supply Source: Vanitec, QEM Investor Presentation 2 September 2020

Australia faces urgent issues when it comes to energy security. Julia Creek holds significant potential to contribute towards local fuel supply, especially for the agriculture, mining and defence sectors.

The Julia Creek project holds JORC 2012 mineral resources of 2,760 million tonnes with a grade of 0.3% V2O5 which bring the project among the largest Vanadium resource projects globally. The project also contains 3C oil resources of 783 million barrels of oil equivalent.

Strong Management with Skin in the Game and Proven Track Record

QEM is led by an experienced management team supported by deeply knowledgeable technical professionals. The management team encompasses extensive mining expertise, with a proven track record of succesfuly developing minerals project globally.

Source: QEM Investor Presentation 2 September 2020

Source: QEM Investor Presentation 2 September 2020

The management team holds substantial ownership in QEM, aligning their interests with that of the investors and underpins a pragmatic strategy to create long-term value for QEM’s shareholders.

The management team includes-

  • Mr John Foley, Chairman - Over 30 years of experience across mineral resources, financial and investment sectors.
  • Gavin Loyden, Managing Director – Founder of QEM Limited and further led the acquisition, exploration and development of the Julia Creek Vanadium and Oil Shale Project.
  • Daniel Harris, Non-Executive Director – Over 37 years of experience in the mineral resources sector, specialising in vanadium, across Russia, Australia, the United States and South Africa.
  • David Fitch, Non-Executive Director – Experienced in managing assets worth over $250 million with key exposure to strategic planning, negotiations, operations and asset management and development.

Growth Focused: QEM has been rapidly progressing on the exploration and development of the Julia Creek Project. Recent test work highlighted the significant potential for the project.

QEM now plans to further expand the test program to optimise the testing parameters.

Here are the highlights of the recent test works-

  • Oil yield up to 181 kg per tonne of oil shares using hydrogen donor solvent which is almost 218% of the Modified Fischer Assay (MFA)
  • Oil Yield consistent at 175% of Modified Fischer Assay (MFA) oil yields over a range of varying test conditions
  • Test work approaching completion for vanadium extraction rates within the shale portions. Initial results show 90% yield via acid extraction is achievable from the ashed ore.

QEM development strategy of 2020 Source: QEM Investor Presentation, 2 September 2020

QEM development strategy of 2020 Source: QEM Investor Presentation, 2 September 2020

QEM plans to further continue the test programs to optimise acid leach testing parameters (temperature, capacity). The company is also investigating alternative extraction methods for vanadium pentoxide, including roasting tests using soda ash and alternate salt extraction in pursuit of optimum economic outcomes.

Economic assessment, engineering studies and a decision on the pre-feasibility study is anticipated in late 2020.

QEM Limited closed at $0.91 a share on 3 September 2020, with a market capitalisation of $9.1 million.

All financial information pertains to Australian dollar unless stated otherwise.

 

 


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