Liontown delivers its first vanadium resource in Queensland; shares jump
Liontown Resources has released its very first vanadium resource of over 80 million tonnes for a project called “Toolebuc” in Queensland.
Lithium explorer Liontown (ASX:LTR) has now expanded its suite of battery metals and says there is still heaps more room for the vanadium resource to grow.
The news pushed shares up 7.4 per cent to an intra-day high of 2.9c on Monday morning.
The resource totals 84 million tonnes at 0.3 per cent vanadium pentoxide (V2O5) for the moment, but it remains open.
Liontown has outlined an exploration target of 100 to 110 million tonnes at an average grade of between 0.28 per cent and 0.32 per cent – which is on top of the current “inferred” resource.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured.
The project is next door to vanadium deposits worked by Intermin Resources (ASX:IRC) that host inferred resources of 1.76 billion tonnes at 0.31 per cent V2O5 and 0.67 billion tonnes at 0.35 per cent V2O5 respectively.
Managing director David Richards told Stockhead that while the style of deposits in Queensland are lower grade than those in Western Australia, they are much lower cost to explore and mine because they are close to surface.
“These deposits tend to be shallow, they tend to be soft, they are much lower cost mining,” he said.
“It’s a lower grade compared with the style of deposits you get in Western Australia but it compares well with the same style of deposit elsewhere in the world.”
“Vanadium has been one of the strongest performing metals of the past two years, on the back of tight global supply and emerging demand from the grid-scale energy storage and renewable energy sectors, where it is used in vanadium redox batteries, or VRB’s,” Mr Richards said.
The price of vanadium has rocketed 550 per cent in the past three years — and related ASX stocks have been performing very strongly.
Major Chinese players are starting to sit up and take notice of Australian miners.
Late last month Australian Vanadium (ASX:AVL) inked an agreement with a private Chinese steel and alloy producer that could pave the way for a potential financing and sales deal for the company’s Gabanintha project.
While the battery market has been in the spotlight for some time now due to the anticipated big growth, the key driver for vanadium demand will still be steel and alloys.
And China’s environmental crackdown has seen the Asian powerhouse introduce stricter standards for Chinese rebar – a reinforcing steel used in concrete.
The growth in alloys in China has been increasing dramatically, and is predicted to underpin a 20 to 30 per cent increase in V2O5 demand in the fourth quarter of this year.
Liontown is aiming to undertake further drilling of around 1000 to 2000m this quarter if possible to expand the resource at its Toolebuc project.