Special Report: By adding a simple refinement step Technology Metals (ASX:TMT) has delivered an incredible 99.7 per cent purity vanadium pentoxide (V2O5) product – which attracts significantly higher prices.

This high purity vanadium means Technology Metals can target the speciality chemical, battery and aeronautical industries with some of the intended production from its flagship Gabanintha project, which is currently undergoing a definitive feasibility study (DFS).

Miners undertake up to four different types of studies to determine whether or not a resource can be mined economically.

These are – in order of importance — scoping, preliminary feasibility (PFS), definitive feasibility (DFS) and bankable feasibility (BFS).

V2O5 supplied to these speciality markets commands substantial premiums to the 98 per cent V2O5 pricing, which is currently at about $US30/lb – a huge leap from $US5/lb in 2017.

Analysis of the drill samples at Gabanintha has also highlighted significant cobalt, nickel and copper sulphides.

The successful metallurgical test work at Gabanintha produced a high-grade copper, nickel and cobalt concentrate from tailings (or waste) – which could be a huge boost for the project’s profitability.

The metallurgical test work program – designed to optimise the vanadium product for end users – continues, with optimisation test work underway on a bulk sample which replicates the expected ore to be processed through the plant.

The final vanadium product from this phase of test work is expected to be available during the March 2019 quarter.

Vanadium frontrunner

Of the 40 or so ASX listed stocks that offer exposure to vanadium – the hottest metal of the year – Technology Metals is one of the closest to production.

With vanadium supply failing to cater for increasing demand — pushing vanadium prices to record highs — Technology Metals wants to have the Gabanintha mine up and running by 2021.

It estimates that the Gabanintha operation, near Meekatharra in Western Australia, would generate $3.1 billion of total earnings before interest tax, depreciation and amortisation.

It would only take 2.5 years to pay back its initial construction costs of $380 million.

This is all based on a long term V2O5 price of about $US13/ lb – currently, the vanadium spot price is above $35/lb.

And Technology Metals is confident its DFS can improve on this already excellent base case pre-feasibility study completed in June.

The DFS is expected to be completed in the June quarter next year.

 

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