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Technology Metals Australia Ltd: THE INVESTMENT CASE

Technology Metals Australia’s new tenement adds to billion-dollar vanadium potential

The Gabanintha Vanadium Project is one of the highest-grade vanadium deposits in the world.
project area
INVESTMENT OVERVIEW: TMT The Big Picture
Definitive feasibility study planning is progressing well

Technology Metals Australia Ltd (ASX:TMT) has acquired additional tenure adjacent to the Northern Block of tenements at its 100%-owned Gabanintha Vanadium Project in Western Australia.

The company’s recently completed pre-feasibility study (PFS) was based on the Northern Block indicated resource of 21.6 million tonnes at 0.9% vanadium pentoxide (V2O5).

READ: Technology Metals Australia PFS results forecast billion dollar vanadium project

Technology Metals’ PFS confirmed the project as a high-value, relatively low-risk and technically strong project.

Using a 10% discount rate, the project’s pre-tax net present value (NPV) has been estimated at $1.27 billion based on a 13-year mine life, which has good potential to be extended.

The newly acquired tenement covers an area of 109.2 hectares and adjoins the Northern Block to the west of the proposed Main Pit.

This tenement acquisition provides the company with a high degree of optionality with regard to the development of the project.

It also provides scope for a more centrally located processing plant and/or additional areas for the location of waste/ low-grade ore stockpiles and other associated infrastructure.

Proposed mine based on small portion of JORC resource

The PFS proposed mining operation is based on the ore reserve of 16.7 million tonnes at a mined grade of 0.96% V2O5.

Notably, the total Gabanintha Project comprises a global indicated and inferred resource of 119.9 million tonnes at 0.8% V2O5.

Progressing to definitive feasibility study

A range of development options incorporating the additional landholding will be fully investigated during the definitive feasibility study (DFS).

Planning for the DFS is well underway, with the level of detail and high quality of the PFS enabling a rapid transition to the DFS, which will commence in the current quarter.

Technology Metals managing director Ian Prentice said: “This strategic tenement acquisition provides a high level of optionality and flexibility to the Gabanintha project as we progress through the next stage on the pathway to developing this globally significant vanadium deposit.”

Vanadium market in deficit

Consumption in 2017 (about 85,800 tonnes of vanadium metal) was dominated by steel alloys (86%) with chemical industry and energy storage at 9% and aeronautical at 5%.

Global industry rationalisation, strict environmental regulations in China and limited new supply has resulted in a production decline for vanadium.

 

The global deficit is forecast to increase to about 28,500 tonnes V2O5 in 2021 and about 39,300 tonnes V2O5 in 2023.

Furthermore, vanadium redox batteries (VRB’s) are emerging as an efficient storage and re-supply solution for renewable energy, suitable for large-scale applications.

VRB and chemical industry vanadium demand is set to climb to 23,730 tonnes of vanadium metal by 2020 and is expected to lead to a sustained increase in the metal price.

 

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