Down 16.67% over the past 5-days, Australian Vanadium shares continued to nosedive in today’s trade despite the company unleashing the high-grade vanadium resources at Gabanintha.
Australian Vanadium Limited (ASX: AVL) showed up in recently held Technology and Low Emission Minerals Conference with the presentation titled “The World’s Next High-Grade Vanadium Mine.”
Gabanintha Vanadium Project has been the highlight of the presentation. The company positions Gabanintha project as its significant vanadium resource which holds the net present value (NPV) of US$2.37 billion at US$20/lb. Located in the mining town of Meekatharra in Western Australia, the Gabanintha Vanadium Project comprises of high-grade Vanadium-Titanium-Iron deposit with a mine life of 17 years.
It has a massive high-grade zone of 93.6Mt at 1% V?O? with globally significant vanadium resource of 175.5Mt at 0.77% V?O?. The company announced a 11 km project strike at Gabanintha Project and 100% owned mining approval underway.
Steel remains the primary market for Vanadium that consumes around 92% of production, driving the vanadium prices. The presentation revealed that new standards for Chinese rebar, which is a key metric to gauge vanadium consumption, has increased the requisite for vanadium used to almost double that of the rest-of-world standards.
The company expects to see an upsurge in vanadium demands driven by emerging new steel markets like materials for automotive, aviation and aerospace; power lines and power pylons; and high-strength steel structures.
In the wake of vanadium market future, Australian Vanadium stated that the increased demand from Vanadium Redox Flow Batteries (VRFBs) and tightened environmental controls in China has pushed the requirement for new supplies of vanadium across the globe.
VRFBs provide a way to store and resupply renewable energy with an ideal high capacity for large-scale energy storage applications. With the ongoing demand of VRFBs, the deposits having high in-situ grade combined with high concentrate grade underscores the opportunity to succeed.
The base case released on the ongoing pre-feasibility study in September this year has presented the capital expenditure of US$360 million at Gabanintha and operating expenditure of US$4.28/lb for the mineral resource of 10,100 tonnes V2O5 per annum. Moreover, the pre-feasibility study is set for completion by December 2018
Since vanadium supply is currently in deficit, the company expects global vanadium producers to increase their supply by at least half of the supply deficit.
In today’s trading session, Australian Vanadium stock plunged by 10% to the last close at $0.027 on 23 November 2018. Although the AVL’s share price has surged by 66.67% over the past one year, the stock has witnessed a negative performance change of massive 47.37%.
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