ENERGY MINERALS

Technology Metals jumps on offtake deal

TECHNOLOGY Metals Australia has signed its first binding vanadium offtake agreement and is continuing discussions with a related party to the offtaker about funding and building the Gabanintha vanadium project in Western Australia.

Technology Metals Australia's Gabanintha vanadium project

Technology Metals Australia's Gabanintha vanadium project

The offtake agreement signed with Chinese company CNMC (Ningxia) Orient Group Co is for 2000 tonnes per annum of vanadium for three years, equivalent to about 16% of the forecast annual production from the planned project, and worth (at current prices and exchange rates), about A$50 million per annum in revenue.

The funding and construction discussions are with CNMNC's sister company NFC, and are said to be at a "very early stage".

CNMNC is involved in producing vanadium nitrogen alloys and ferrovanadium for use in the Chinese steel industry.

Technology Metals completed a definitive feasibility study for Gabanintha last year.

The ASX-listed junior needs about US$318 million to build Gabanintha, with the project calculated to have a pre-tax net present value of $924 million, an internal rate of return of 34% and a payback of just over three years.

The project, located near Meekatharra, has a 16-year mine life.

Shares in Technology Metals closed Monday up 42% to A11.5c, capitalising the company at $12 million.

Technology Metals raised just over $2 million in new equity in February when it placed new shares priced at about 11c each.

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