Here are 5 factors that set Pursuit apart from the vanadium pack
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Special Report: Pursuit Minerals is speeding towards the completion of scoping studies for its two vanadium projects in Scandinavia.
The outcome of scoping studies on the Airijoki in Sweden and Koitelainen in Finland is expected to be known in the next week or two and Pursuit (ASX:PUR) is working hard to differentiate itself from other vanadium players.
Here are five reasons why Pursuit could be the one to chase.
Pursuit has been quick to deliver mineral resources for its two key projects.
The resource for its Koitelainen project, in Finland, is based solely on historical data obtained prior to Pursuit acquiring the project, meaning the company didn’t even have to pay for any drilling to release its first resource.
“We’ve been able to build a mineral resource and then use that resource to produce a Scoping Study level financial model without actually having to do any drilling ourselves, which is great value for money,” managing director Jeremy Read told Stockhead.
Meanwhile, over at Airijoki in northern Sweden, Pursuit delivered a maiden resource earlier this year after taking only five weeks to drill 18 holes.
And these are significant resources. At Koitelainen, the resource totals 5.8 million tonnes of magnetite @ 2.3 per cent V2O5 (in magnetite concentrate), for 131,000 tonnes of V2O5, while at Airijoki, the resource totals 5.9 million tonnes of magnetite @ 1.7 per cent V2O5 (in magnetite concentrate), for 100,800 tonnes of V2O5.
Mr Read said the definition of the inferred resource at Airijoki, along with the inferred resource at the Koitelainen Vosa prospect, meant Pursuit had quickly built an impressive inventory of vanadium resources, allowing the company to accelerate scoping studies for both projects.
The scoping studies are due for completion in mid April.
Another differentiator for Pursuit is the fact that it has two separate vanadium projects.
“A lot of our peer companies, particularly Australian vanadium plays, have one main project, one mineral resource that they’re working on, whereas we’ve got two globally significant vanadium mineral resources and inherently that spreads the risk across our projects, lowering our overall risk profile,” Mr Read said.
Pursuit has also already proven it can produce high-grade vanadium magnetite concentrate from both its projects, with the Koitelainen concentrates being amongst the highest grade globally.
The company hopes to shave a couple of years off the time it takes to reach production by producing a high-grade vanadium magnetite concentrate, and selling that directly, instead of producing vanadium pentoxide flake.
This also means Pursuit can potentially bring its projects into production at a significantly lower capital cost than its peers who are planning on producing vanadium pentoxide flake, which requires an expensive and complex salt roasting process.
A mine and smelter producing vanadium pentoxide flake could cost from around $500m to $1-2 billion to develop, but an operation producing vanadium magnetite concentrate would cost substantially less, which should make Pursuit’s plans far easier to finance.
“Our plan is to produce high-grade vanadium magnetite concentrate, which keeps capex down, simplifies our approval processes from the government perspective and allows us to get into production more quickly,” Mr Read said.
The location of Pursuit’s projects in Europe is also a significant advantage. Finland and Sweden have long mining histories and clearly defined regulatory and permitting regimes well established. That gives Pursuit a much higher level of confidence in the operating jurisdictions and reduces overall risks.
Europe is also going all in on renewable energy, which means it’s going to need batteries to store that energy.
And the big contender is vanadium redox flow batteries – which are tipped to witness massive growth in years to come.
“Europe is far more advanced than Australia in terms of renewable energy take-up and infrastructure to provide renewable energy,” Mr Read said.
There have been some major policy changes surrounding renewable energy. For example, Germany wants to completely eliminate coal-fired power by 2038.
“Coal is still significant to the energy mix in Germany and if they are going to phase it out within the next 19 years, they’re going to have to invest heavily in battery storage capacity because they won’t be able to move to renewables without it,” Mr Read explained.
This means greater interest will flow down the chain to vanadium projects like Pursuit’s and particularly vanadium projects located in Europe.
“Vanadium redox flow batteries are getting all the attention at the moment because that’s the segment of vanadium consumption which is growing at 60 per cent per annum.
“But in addition, demand for vanadium in steel production is increasing rapidly due to higher standards being introduced in Chinese construction industries which require utilisation of higher strength steel,” he said.
Infrastructure is well developed, with power, transport, water and electrical supply well developed and easily accessible.
Power supply is reliable and much cheaper than in Australia. Pursuit can source its power from the grid at a cost of about 8-9c per kilowatt-hour.
“It’s hydro power and it’s among the cheapest in the world,” Mr Read said. “So that’s important because it keeps operating costs down.”
“Only 50km to the west of us there’s an underground iron ore mine that has been going for 120 years and 100km to the south of us there’s one of Europe’s largest open pit mines,” Mr Read said.
“So, because they’ve had such a long history with mining, all of the mining related infrastructure that is important to get projects into production — like power, roads, rail and an experienced work force — is all there.”