Hardey fast tracks due diligence on operating vanadium mine on strong financial case
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Special report: Hardey Resources has decided the Nelly vanadium mine in Argentina is such a good value proposition that it is fast tracking due diligence.
“Since announcing the proposed acquisition of Nelly vanadium mine, the board has moved quickly to line up a highly capable due diligence team,” executive chairman Terence Clee said.
“Notably, the discovery of legacy stockpiles, which could be monetised as a direct shipping ore product, is very encouraging.
“With the favourable outlook for vanadium demand globally and relative simplicity to reactivate a mining licence in Argentina, the board has decided to expedite due diligence.”
The Nelly mine, which operated between 1949 and 1957, historically produced grades of up to 1.9 per cent vanadium pentoxide (V2O5).
Potential for early cash flow
So far, early due diligence clearly highlights substantial legacy stockpiles around the Nelly mine’s historic workings.
A priority for Hardey will be to bulk sample these stockpiles to determine if they are viable as a potential direct shipping ore (DSO) product to generate early cashflow from the project.
DSO requires only simple crushing before it is exported, which keeps costs low.
Hardey says there is also significant exploration upside from the unexplored areas in and around the historic workings, reflecting the views from earlier geological studies.
Since the mine closed in 1957, there have been several studies undertaken by local geology teams that believe the Nelly mine and surrounding areas are significantly underexplored.
Samples taken by the geologists confirmed the presence of high grade V2O5 as well as lead, zinc, copper, gold, silver, molybdenum and bismuth.
When Nelly was operating during the 1950s, only part of the known resource was exploited, leaving most of the untapped mineralisation intact.
Geologists have determined there are several mineralised veins at surface. While some of them have been mapped, the ones trending underground are completely unexplored.
Two local geology firms have been appointed in Australia and Argentina to jointly facilitate the due diligence review.
An international mining and engineering consultancy will be appointed to conduct a site visit, then write up a thorough assessment.
Following completion of due diligence, Hardey plans to work towards proving up a resource, securing potential customers for the legacy stockpiles, and re-opening the mine.
This special report is brought to you by Hardey Resources.
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