Australian Vanadium’s Gabanintha project would be worth $3.3bn at today’s prices
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Australian Vanadium estimates its Gabanintha project will have a net present value of $US1.1 billion over the first 17 years at an assumed price of $US13/lb, according to an initial production scenario.
NPV is a metric used to assess the value of a project today — based on future projected cashflows. A positive NPV means a project should go ahead. The higher the NPV, the more valuable a project could be.
At current vanadium prices — above $US21/lb, the highest since 2005 — the project would make $US2.4 billion.
Estimated operating costs of $US4.1/lb makes Australian Vanadium’s Gabanintha project competitive with some of the world’s lowest cost producers, it said.
A planned vanadium pentoxide (V2O5) refinery at the Gabanintha site will produce about 10,000t of V2O5 each year over an initial 17 years, with potential to extend the mine life.
The initial vanadium production scenario was being developed for the Gabanintha project as part of the ongoing feasibility study.
This base case demonstrates robust project fundamentals, competitive product costs and financials, “with future optimisation potential”, Australian Vanadium said.
The prefeasibility study is on track, allowing the company to move quickly into piloting and definitive feasibility studies upon completion.
In 2017, vanadium demand outstripped supply by 10,000 tonnes — about two mines worth — with about 90 per cent of vanadium going into steel production.
This has pushed vanadium to its highest price in over a decade, and sent the share prices of vanadium hopefuls through the roof.