The House (2017)

Vanadium is still looking mighty attractive to small cap investors, who have sunk a further $6.2m into Australian Vanadium by exercising a bunch of options.

About 90 per cent of global vanadium production is used to make high-strength steel, but future demand stems from its role in vanadium redox flow batteries and other products like “smart” glass windows, which is a multi-billion-dollar market.

>>Read everything you need to know about ASX vanadium stocks

Over 260 of Australian Vanadium’s shareholders converted their options to shares at a cost of 2c each in December.

Only about 16 per cent of the options weren’t converted, but Australian Vanadium had an underwriting deal in place worth $1.2m of the total.

Investors welcomed the news, pushing shares up almost 23 per cent to an intra-day peak of 2.7c, before the price edged back slightly to 2.5c.

Australian Vanadium (ASX:AVL) shares over the past year.
Australian Vanadium (ASX:AVL) shares over the past year.

The extra cash has bumped up Australian Vanadium’s coffers to about $9.7m, which the company says puts it in a strong financial position to complete the definitive feasibility study for its Gabanintha project in Western Australia.

“Starting 2019 with a healthy cash balance enables us to move swiftly forwards with our plans for the AVL Gabanintha vanadium project,” boss Vincent Algar told the market this morning.

“Timelines can now be accelerated, and we are confident that we have a solid basis to inspire confidence in prospective investors and project partners.”

Mr Algar told Stockhead previously there was never a better time to be advancing a high-grade Australian vanadium project into production.

Vanadium was one of 2018’s best performing metals, with the spot price rocketing to above $US37 ($51.58) per pound — up from $US5 in early 2017.

While the price has come off its highs, it is still trading well above what it was in early 2017.

Australian Vanadium’s Gabanintha project hosts a total resource of 183.6 million tonnes at 0.76 per cent vanadium pentoxide (V2O5), including a high-grade zone of 96.7 million tonnes at 1 per cent V2O5.

It also now has a reserve of 18.2 million tonnes at 1.04 per cent V2O5.

Reserves refer to discoveries that are commercially recoverable using existing technology.