Maiden Ore Reserve of 18.24Mt at 1.04% V2O5 comprised of a Proved Reserve of 9.82Mt at 1.07% V2O5 and a Probable Reserve of 8.42Mt at 1.01% V2O5
Open pit mining and beneficiation operation producing approximately 900,000 tonnes per annum of 1.40% V2O5 magnetite concentrate at an average yield of 60%
Planned vanadium pentoxide (V2O5) refinery at Gabanintha site with a production rate of approximately 22.5Mlb V2O5 per annum over an initial mine life of 17 years
Significant potential to extend operations and mine life along strike for an additional 8 km within Mining Lease Application M 51/878
Average C1** operating expenses estimated at US$4.15/lb V2O5 equivalent (±25%), competitive with the world’s lowest quartile producers.
Capital costs of approximately US$354 million (±25%). This includes owner’s costs, contingencies and a partial gas pipeline investment.
Ungeared post-tax NPV 8% ranges between US$125 million and US$1.41 billion, depending on the pricing assumption, indicating a robust project
Conservative long-term average V2O5 product pricing assumption of US$8.67/lb used for financial modelling. Medium term price assumptions of US$13/lb and US$20/lb are considered and presented.
Current V2O5 price trading at US$22/lb (source: Fastmarkets) with anticipated ongoing supply shortfall until at least 2025
Positive outcomes and strong vanadium market fundamentals support immediate progression to a Definitive Feasibility Study, with further drilling for pilot study scheduled to commence January 2019
The mine plan includes 21% Inferred Resources. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the
determination of Indicated Mineral Resources or that the production target itself will be realised
Other outputs from the PFS include:
Average mass yield from the concentrator is estimated at 60% for the life of mine. This is exceptionally high versus other current operating vanadium operations, allowing for a compact and effective crushing and milling operation.
A base metals circuit will extract an estimated 1,775 t/a mixed sulphide concentrate containing cobalt, nickel, and copper in years 3 to 16.
The project viability is not dependent on the mining and sale of base metals contained in the schedule.
Base metal sales account for ~1% of estimated overall gross revenues for the life of the project.
Operating expenses (C1 costs) are currently estimated at US$4.15/lb V2O5 equivalent (±25%), assuring a low-cost operation that will be healthy throughout the vanadium business cycles.
Initial indicative capital costs of US$354M (±25%). The current project scenario utilises 43% Measured resources, 37% Indicated resources and 21% Inferred resources. The Inferred resources are not a determining factor for project viability.
The financial outcomes are shown in Table 2 below. NPV and IRR are reported at various V2O5 pricing assumptions. Assuming a V2O5 price of US$13/lb, pre-tax NPV is US$912M, with an IRR of 27.2%.
Using US$8.67/lb V2O5, the post-tax NPV of US$125M highlights that the Project is robust and offers attractive returns even at conservative pricing assumptions.
Every single item much better that previously estimated. Everything is much better than what promised.
All these exceptional, but realistic, modest, but great work will be reflecting to SP near future.
AVL Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
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