After killing some time looking at the AVL announcement and...

After killing some time looking at the AVL announcement and looking back at the announcement of AEE (on 23 May 2018), I realised that the proposed operation sizes are going to be similar. Well, the feasibility study of AEE is not yet announced (imminent must be the word to be used here!) but some ideas about the operation size were given.

AVL

A vanadium pentoxide (V2O5) refinery at the Gabanintha site with an annual production rate of approximately 22.5 million pounds of V2O5 per annum (10,100tpa) with an initial mine life of 17 years based on existing Measured, Indicated and a portion of the Inferred Mineral Resources.

AEE

Of particular interest within this 90 million tonnes is the definition of a coherent and large zone of mineralisation of 49 million tonnes at +0.4% vanadium pentoxide commencing at a depth of 20 metres below surface and extending to around 100 metres below surface.

“To put this in context, if Häggån were to produce approximately 5% of the current global vanadium production, we would be able to mine this high-grade pod for around 20 years, from resource blocks containing over 0.4% V2O5”, Mr Reeve commented. “And mining would not have to go deeper than approximately 100 metres for the first 15 years of production.”


So, a  simple calculation for AEE gives:
49 million  divided by 20 years = 2.45 million tonnes per year or 9,800 tonnes of V205 per year (at 0.4 per cent grade).


The grade of AVL is higher but the mineral is not coherent. From today's AVL announcement:

The mineral deposit consists of a basal massive magnetite zone (10m - 15m in drilled thickness), containing greater than 0.8% V2O5, overlain by up to five lower grade mineralised magnetite banded gabbro units between 5 and 30m thick, separated by thin waste zones (<0.3% V2O5). Vanadium mineralisation is found in the basal massive magnetite horizon, as well as the lower grade banded magnetite gabbro horizons overlying the main high grade unit.

They need to dig deeper to get the high grade zone. From todays' AVL announcement:

The initial Gabanintha open pit is planned to be 2,700 metres long, 380m wide and 220m deep

AVL costs
Operating expense: US$4.13/lb
Capital expenditure: US$360M

The Net Present Value (NPV) ranges between US$191 million and $2.37 billion dollars, depending on the pricing assumption. The NPV is estimated at US$1.1B using a Life of Mine V2O5 commodity price forecast of US$13/lb. At current V2O5 market prices of US$20/lb, project NPV is US$2.4B, highlighting the project’s upside potential.