The company flagged the potential for cobalt recoveries after significant assays from drilling in fresh rock last year, and since that time the price of cobalt has risen to over US$90,000 per tonne, and that has only sharpened the interest in potential by-products.
Work has now successfully extracted a sulphide concentrate containing up to 6.3% base metals (cobalt, nickel and copper) from the non-magnetic tail produced when preparing the vanadium concentrate.
While AVL won't benefit directly from any nickel, copper or gold - those rights are held by Bryah Resources - but it owns 14% in Bryah and will benefit indirectly. It has 100% of the cobalt rights.
"Adding a high-value battery focused metal to the product suite at Gabanintha could potentially prove an important revenue stream, further enabling AVL's Gabanintha project to be on the lowest end of the vanadium cost curve," managing director Vincent Algar said.
The scope of the prefeasibility study has been expanded to include preliminary design and costing for a sulphide recovery circuit.
Discussions will also begin to establish indicative terms for the sale of a sulphide concentrate.
An updated resource will include sulphur and base metals, allowing them to be included in the pit-optimisation studies and wider PFS.
While the sulphides are only observed in fresh rock at Gabanintha, and have a higher abundance overall in the main zone of economic interest, the basal massive magnetite horizon, drilling suggests the vanadium-rich massive iron mineralisation could extend over the company's 11km of tenure.
AVL shares were up 4.9% to 4.3c in morning trade, valuing the company at $69 million, while Bryah shares jumped 6.9% to 15.5c, capitalising it at $8.7 million.