Technology Metals runs ahead of the vanadium pack
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Special Report: Vanadium frontrunner Technology Metals Australia is making rapid progress on its Gabanintha definitive feasibility study which it aims to complete in the June quarter next year.
Of the 40 or so ASX listed stocks that offer exposure to vanadium – the hottest metal of the year – Technology Metals is one the closest to production.
With vanadium supply failing to cater for increasing demand — pushing vanadium prices to record highs — Technology Metals (ASX:TMT) wants to have the Gabanintha mine up and running by 2021.
This base case estimates that the Gabanintha operation, near Meekatharra in Western Australia, would generate $3.1 billion of total earnings before interest tax, depreciation and amortisation.
It would only take 2.5 years to pay back its initial construction costs $380 million.
This is all based on a long term V025 price of about $US13/ lb – currently, the vanadium spot price is above $35/lb, and rising.
And TMT is confident it’s DFS can improve on this already excellent base case pre-feasibility study completed in June.
Miners undertake up to four different types of studies to determine whether a resource can be mined economically.
These are scoping, preliminary feasibility (PFS), definitive feasibility (DFS) and bankable feasibility (BFS).
During the September quarter the company and a team of experienced industry expert consultants made significant progress on all facets of the DFS.
In September, Technology Metals confirmed it could produce a final high purity vanadium product from its Gabanintha project for end users, with samples now on the way to potential customers in the steel and and vanadium redox flow battery (VRB) industry sectors.
Test work produced a +99.5 per cent vanadium pentoxide (V2O5) product from a 60kg sample of high-grade magnetite mineralisation using low-cost conventional processing methods.
Benchmark vanadium pentoxide pricing is based on a 98 per cent purity product.
With a high purity product, Technology Metals can target the speciality chemical and aeronautical industries and receive premium pricing.
In October the company completed its Stage 1 project enhancement drilling to support the DFS.
All drilling hit broad zones of mineralisation — including 25 to 50m below the current Indicated Resource to depths to 190m – which sets Gabanintha up for a big resource upgrade.
The drilling also provided geotechnical data for the proposed open pit walls and generated additional samples for metallurgical test work.
“The stage 1 enhancement drilling program has delivered very exciting outcomes with confirmation of very shallow oxidation in the North Pit and Southern Tenement, depth extension of the massive magnetite mineralisation and overall footwall competency that is likely to deliver steeper pit walls,” Technology Metals managing director Ian Prentice said.
Steep pit walls reduce the amount of waste that needs to be moved to reach the ore, which means smaller operating costs.
In October, Technology Metals management had a number of very constructive one on-one meetings with a range of investors at the 121 Mining Investment Conference in Hong Kong.
Management had also attended the FerroAlloyNet International Vanadium Products Summit in China, where the company continued to build relationships with a range of vanadium end users and producers.
Strengthening these relationships with vanadium end users and producers, in parallel with the rapid progression of the development of the project, is a key part of Technology Metals’ strategy to rapidly progress development of its very high quality, high grade Gabanintha project.