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AVL says the study shows Australia's first modern vanadium mine has a strong commercial case for development to support the critical and battery minerals
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Based on updated reserves of 30.9 million tonnes grading 1.09% vanadium pentoxide, with proved reserves of 10.5Mt at 1.11% and probable reserves of 20.4Mt at 1.07% the operation can support at least 25 years of mine life.
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Describing the A$604 million development as a "potentially globally significant primary vanadium producer", the BFS has delivered a pre-tax net present value of $833 million and an internal rate of return of 20.6% assuming a US$10.50 per pound vanadium price. C1 cash costs are expected at $4.43/lb.
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Currently the metal is selling at just over $12/lb.
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The BFS forecasts a fairly long seven-year payback from first production, based on annual earnings of A$175 million, however at current pricing levels, NPV jumps to $1.28 billion.
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AVL believes it has delivered a de-risked flow sheet that will support the mining operation and concentrator, and a planned $265 million Tenindewa processing plant that will be located 450km away, on the coast at Geraldton, which offers access to power and export facilities.
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With an expected 74.2% recovery rate, the facility is expected to deliver average annual production of 24.7Mlb vanadium as a 99.5% high purity flake, plus 900,000tpa of iron titanium co-product that is likely to be sent to China for use in steel mills.
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The company can now take the BFS to talk to potential funders, including international resource banks, the Northern Australia Infrastructure Facility and Export Finance Australia.
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The company claims to have one of the most advanced vanadium projects globally, and recently scored a Commonwealth Modern Manufacturing Initiative grant worth $49 million.
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Upside is in the global resource of 239Mt at 0.73%, and the potential for improvements in costs.
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Testwork continues to optimise the project, including production of vanadium electrolyte for redox flow batteries.
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AVL aims to deliver a mining proposal to the WA government in May. Front-end engineering and design studies are expected to follow before mid-year.
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Construction is expected to commence in the fourth quarter of 2023, with first production in late 2025.
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AVL has cash at bank of some $4 million.
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Shares in AVL were off 5% today at 9.3c, valuing it at $327 million.
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The stock has traded at 1.6-11.5c over the past year.听
