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

 

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.

 

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.

 

Currently the metal is selling at just over $12/lb.

 

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.

 

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.

 

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.

 

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.

 

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.

 

Upside is in the global resource of 239Mt at 0.73%, and the potential for improvements in costs.

 

Testwork continues to optimise the project, including production of vanadium electrolyte for redox flow batteries.

 

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.

 

Construction is expected to commence in the fourth quarter of 2023, with first production in late 2025.

 

AVL has cash at bank of some $4 million.

 

Shares in AVL were off 5% today at 9.3c, valuing it at $327 million.

 

The stock has traded at 1.6-11.5c over the past year.