Ann: Appendix 3B, page-11

Vanadium outlook 2019: Higher prices, smaller supply:

After spiking to its 13-year high in November, the price of V2O5 flake used in energy storage has come down from roughly US$33 per pound to US$23.90. Ferrovanadium used in steel manufacturing also experienced a price drop and now sits at US$98 per kilogram.

However, insiders see the price decrease as a momentary hiccup, and expect the positive trajectory experienced in 2018 to continue.

“The expectation is that vanadium prices will continue to rise and the development of new mineral properties previously uneconomically viable will grow,” said CellCube’s Neylan. “Companies with high vanadium production costs will have difficulty if prices moderate or decline.”

This positive outlook was reiterated by Moore of Energy Fuels.

“We believe vanadium markets will remain strong in 2019 and 2020,” said Moore. “Today’s market strength is caused by significant production cuts, primarily in China, for environmental, health and safety reasons, along with significant increased demand, primarily due to new rebar standards in China that can only be met through increased use of vanadium.”

While producers remain optimistic that the price growth will stay the course, Roskill gave a more subdued outlook.

In fact, according to Bedder, price growth could negatively impact the VRFB sector.

“Roskill’s baseline forecasts suggest that demand from this sector may plateau for some years until vanadium supply increases and prices retreat,” he said.

While there are a number of vanadium projects at various levels of development around the world, meeting increased demand could prove harder than many anticipate.

“The key question for the market is how will supply increase to meet demand,” added Bedder. “There is only so much more material that can come from co-production in China, especially during a period of environmental inspections and steel industry consolidations.”

“We expect prices to remain high for some time — so it’s the perfect time to finance and develop a project,” he said.

https://investingnews.com/daily/res...nvesting/vanadium-investing/vanadium-outlook/

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