This company is carving itself a piece of the vanadium battery metals pie
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Vanadium is an emerging battery metal that is widely expected to see growing demand as the adoption of vanadium redox flow batteries (VRFBs) increases.
While demand from the steel industry, which uses the metal to harden steel, is expected to remain stable, demand from the VRFB sector is expected to rise to at least 9,100t of vanadium pentoxide (V²O⁵) in 2022 from this year’s 3,640t, according to Argus Media.
This is likely to grow further as awareness grows of VRFB systems such as China’s giant battery farm in Dalian, which will have total storage capacity of 800 megawatt hours (MWh) once it’s fully operational next year.
The Dalian battery will be one of the largest battery energy storage systems in the world.
VRFBs have a higher upfront cost of up to 30% to 40% more than lithium-ion batteries, however they have a better return on investment due to their significant advantages.
These include having an effectively unlimited number of charge cycles – with the current 30-year estimate coming about due to how old the technology is and the greater safety due to the lack of the runaway heat effect found in lithium batteries.
Critical Minerals Group, which is targeting to launch its $5m initial public offering priced at 20c per share at the beginning of December, is looking to capitalise on this expected growth in demand not only because it is a sound investment decision but also because they want to see Vanadium batteries being used to help decarbonise the future.
Speaking with Stockhead, managing director Scott Drelincourt said that after years of working on greenfields and brownfields exploration, open cut and underground mines, for major coal miners, he turned his attention to critical minerals ethical reasons.
And he has gathered a board that is in alignment with him.
“We have our executive director Stuart McClure who founded CMG and picked up the Vanadium tenements in Julia Creek in early 2021. He has a background in corporate advisory having led several IPO’s, RTO’s and M&A transactions at his role with Vested Equities heading up the corporate advisory team.
He adds that the company is very fortunate to have Alan Broome as its chairman.
“Among his many achievements Alan received the Order of Australia for his services to mining and sits on the Mineral Resources Sector Advisory Council of the CSIRO. ” Drelincourt noted.
“Alan is passionate about the critical minerals space and once he understood our ESG values that underpin the company and the strategy we had put together to deliver for the company, he really wanted to get involved.
Having a strategically aligned team with a strong ESG focus has enabled us to work well together,” Drelincourt explained.
The company has the perfect vehicle for its vanadium ambitions being well located in a known vanadium province at Julia Creek – host to QEM’s project and Multicom’s St Elmo project which is entering the construction phase.
The 295sqkm Lindfield project in northwest Queensland includes a number of drill holes with promising grades along with an existing JORC resource of 210 million tonnes grading 0.39% V²O⁵, which Drelincourt noted is higher than almost all of the company’s peers.
Significantly, the resource outcrops at surface which means the shallow nature of the mineralisation is expected to reduce mining costs due to the low strip ratio.
The southern portion of the project is also intersected by the Flinders Highway and the heavy gauge Great Northern Railway that goes straight to the port at Townsville.
“We have got all the things in place – power, water and infrastructure,” Drelincourt said.
“And when you look at our grades, which are significantly higher than our peers with similar tonnages, Lindfield looks very attactive with only simple processing required.”
There is also considerable political support with the federal and state governments offering financial incentives through grants and loans for critical minerals projects. Additionally the Queensland’s mines department has been collaborating with all companies in the sector to help get vanadium up and running.
Drelincourt adds that the company will look to carry out downstream processing of battery grade vanadium electrolyte itself.
“The process to extract the vanadium is not complex and can be made to produce directly, vanadium electrolyte used in VRFBs or can be made to produce V²O⁵ which is added to steel as small amount of vanadium increases the strength of steel significantly.”
He’s also bullish about the prospects for VRFBs, noting that there were opportunities for large scale grid storage and backup and for renewable energy storage such as energy generated from wind and solar plants to be utilised when the sun is not shining or the wind is not blowing.
Adding further interest, there is also potential for high-purity alumina (HPA) to be produced at Lindfield based on historic drill results..
Lindfield is not the only project in Critical Minerals’ books.
The company also owns the 70sqkm Figtree and 51sqkm Lorena Surrounds copper-gold projects in northwest Queensland near Cloncurry.
Both projects are also located close to advanced copper-gold projects as well as existing infrastructure.
Figtree has a number of rock chip samples, soil samples and stream sediment samples showing anomalous copper and gold.
It also hosts a number of magnetic anomalies with an anomaly in the south being very similar to that at the Great Australian Mine about 3km to the north that contains a JORC resource of 1.68Mt at 2.29% copper and 0.23g/t gold.
Meanwhile, Lorena Surrounds consists of three discrete groups in the Pumpkin Goldfield where both the Lorena gold mine and Gilden Rose gold deposit are located.
It features three historical drill holes in the western group with the second hole returning a drill intersection of 13m at 0.2% copper and 0.11g/t gold from a depth of 169m.
Encouragingly, hydrothermal veins and breccia were observed and feldspar-quartz-calcite alteration and coarse dissemination of magnetite were logged in sheared meta-dolerite rocks on drill core, which is analogous to the typical IOCG mineralisation in the region.
“What makes this exciting as a greenfields exploration project is that it has never been properly explored due to a layer of alluvial cover,” Drelincourt explained.
“We are going to be moving pretty aggressively with all three of our projects, particularly Lindfield, but we will also be looking to develop and acquire other critical mineral deposits.”
Drelincourt isn’t joking about being aggressive.
Critical Minerals Group is poised to start roadshows to get investors aware of the company and its ethos before it kicks off its IPO in early December.
Post listing, the company intends to start drilling after the wet season in March-April to obtain bulk samples.
“Once that comes back, we can upgrade our JORC resource category, tonnage and grade,” he added.
“We will then commence metallurgical testwork. which will include beneficiation work to ultimately develop a processing flow sheet.
“We will also be undertaking a scoping study, we will be taking the metallurgical work to a bulk scale that may include a pilot plant.”
The company will then look to commence pre-feasibility studies in early 2023 before moving to definitive or bankable feasibility studies that will include all environmental work, licensing agreements, etc in 2024 with a target to start construction and production in 2025.
“It may seem ambitious but it’s all achievable; We have got the team, specialists, on board to deliver the projects,” says Drelincourt.
This article was developed in collaboration with Critical Minerals Group, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.