Technology Metals will grow its vanadium resource with new high-grade hits
Special report: Further drilling by Technology Metals Australia has proven the high grades continue at its Gabanintha vanadium project.
The results of the stage one enhancement drilling, being undertaken as part of a definitive feasibility study (DFS), are expected to “materially increase the global resource and more importantly the indicated resource component”, managing director Ian Prentice said.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured.
By moving resources into the indicated category, it means a company has sufficient information on geology and grade continuity to support mine planning.
“The results of the reverse circulation drilling from the stage one enhancement drilling program have delivered exceptional strike continuity, and down dip extension, of the massive magnetite mineralisation,” Mr Prentice said.
The 28-hole drilling program uncovered depth extensions between 25m and 50m downdip of the current indicated resource.
Notable results included 14m at 1.17 per cent vanadium pentoxide (V2O5) from 208m and 12m at 1.17 per cent V2O5 from 192m.
The results indicate that a portion of the previously defined inferred resource will be upgraded to the higher confidence indicated category.
Technology Metals (ASX:TMT) says this highlights the scope to materially deepen the open pit design, and that the inferred resource will be extended further down dip.
Meanwhile, drilling on the southern part of the Central Pit area indicates that the strike length of the indicated resource can be extended by over 300m to the south.
Results included 16m at 1.26 per cent V2O5 from 28m and 14m at 1.14 per cent V2O5 from 90m.
Technology Metals says the new intersections compare “very favourably” to earlier results
Infill drilling of the southern tenement also intersected high-grade mineralisation in every hole, with grades consistent with, or exceeding, the resource grades.
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 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 of $380 million.
This is all based on a long term V2O5 price of about $US13/ lb – currently, the vanadium spot price is above $30/lb, and rising.
And Technology Metals is confident it’s DFS can improve on this already excellent base case pre-feasibility study completed in June.
The DFS is expected to be completed in the June quarter next year.
Technology Metals Australia is a Stockhead advertiser.