Feasibility Study results reflect the Australian Vanadium Project’s value as a critical and battery mineral project and provides a strong commercial case for development.


PROJECT HIGHLIGHTS

  • AVL’s Bankable Feasibility Study (BFS) confirms the Australian Vanadium Project as a potential globally significant primary vanadium producer targeting critical mineral, steel and energy storage markets.
  • Australian Government grant of A$49M awarded under the Modern Manufacturing Initiative Collaboration Stream1 to support the Project to production.
  • Technical studies completed, including three years of extensive piloting testwork, supporting robust processing flowsheets, de-risking the Project towards funding and delivery.
  • Pre-tax NPV7.5 of A$833M and equity IRR 20.6% based on US$10.50/lb V2O5 price, A$604M upfront pre-production capital excluding contingency.
  • Updated Ore Reserve of 30.9Mt at 1.09% V2O5 comprised of a Proved Reserve of 10.5Mt at 1.11% V2O5 (vanadium pentoxide) and a Probable Reserve of 20.4Mt at 1.07% V2O5 2 .
  • Anticipated initial mine life of 25 years, supporting a long-life, consistent ore feed operation on AVL’s granted mining lease.
  • Strategic separation of processing plant from minesite and concentrator allows access to competitive natural gas near Geraldton, local workforce and Iron Titanium (FeTi) coproduct sales opportunities through the Port of Geraldton.
  • Average annual vanadium production of 24.7 Mlbs V2O5 (11,200t) as a 99.5% V2O5 high purity flake and 900,000 dry tonnes per annum of FeTi coproduct.
  • Forecast vanadium recovery to concentrate of 74.2% life of mine, supported by pilot testing and comparable to current international primary vanadium operations.
  • Innovative process flowsheet recovers 90% of vanadium in concentrate, utilising tried-andtested grate kiln technology, with valuable reductions in gas consumption and CO2 emissions.
  • Approvals well advanced and Environmental, Social and Governance (ESG) standards and action plans in place.
  • Global critical mineral vanadium market seeing strong growth in demand and pricing (currently over US$12/lb V2O5) with the battery sector showing accelerated uptake in vanadium redox flow batteries.
FINANCIAL OUTCOMES
  • Wood Australia Pty Ltd (Wood), a leading engineering firm with valuable expertise in vanadium and similar mineral processing, has undertaken the engineering and design, providing an overall accuracy for the capital and operating cost estimates of ±15%.
  • Level of study provides a basis for engagement with financing institutions including NAIF, Export Finance Australia and many of the international resource banks.
  • Australian Government grant of A$49M awarded under the Modern Manufacturing Initiative Collaboration Stream1 provides strong additional support to Project funding requirements.
  • Project pre-tax NPV7.5 of A$833M.
  • Equity Project IRR 20.6%.
  • Project payback of 7.3 years after first production.
  • Project annual EBITDA average for 25 years of A$175M.
  • Total Project EBITDA of $4.4B.
  • Upside case offers pre-tax NPV7.5 of $1,287M assuming US$12/lb V2O5 price. This increases to $1,450M with additional improvements in operating expense of 10%.
  • C1 operating cost of US$4.43/lb V2O5 competitive with world primary vanadium producers, includes FeTi coproduct credit.
  • Pre-production plant and associated infrastructure capital cost of US$435M (A$604M), excluding any grant payments and before contingency.

Assumptions 0.72 USD/1 AUD | US$10.50/lb long term average V2O5 price | cost estimation at ±15% level of accuracy | All $ figures are A$ unless stated otherwise

Managing Director Vincent Algar comments, “The high standard of feasibility study that the AVL team and its consultants have completed is a significant milestone for the Company. The positive economic results of the study have occurred in an environment of global inflationary pressure, COVID-19 related impacts and geopolitical instability. We have attempted to accommodate potential areas of challenge by building them into our assumptions and remaining agile when efficiency opportunities present. The award of the $49M MMI grant provides further vindication of the importance and relevance of the Australian Vanadium Project and we acknowledge the responsibility placed upon us, as all Australians are now stakeholders in our work. We are in a period of growing demand for vanadium from both steel and energy storage markets. The robust designs and financials presented in this work firm the pathway to new vanadium production and sets the Project apart as the most advanced new primary vanadium project globally. The thorough study process has reduced risks and therefore increased confidence for parties looking to invest in the future of vanadium from a stable mining region. The Company is now in a position to progress through funding, final engineering, procurement, construction and into production.”

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This article includes content from Australian Vanadium Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

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