Australian Vanadium Ltd (ASX:AVL) will release results of a pre-feasibility study on the Gabanintha Vanadium Project in Western Australia’s Mid-West within days along with a maiden ore reserve.
Accordingly, the company has been granted a trading halt by the ASX.
This will remain in place until the start of normal trading on Wednesday, December 19, 2018, or when an announcement is released to the market, whichever occurs earliest.
Last month, AVL updated the Gabanintha resource, reporting 183.6 million tonnes grading 0.76% vanadium pentoxide.
Within this is a massive magnetite high-grade zone of 96.7 million tonnes at 1.00%, which averages 14 metres in thickness.
Besides vanadium, the project also features titanium and iron, as well as cobalt, copper and nickel in sulphides.
The company published a ‘robust’ base case for its PFS in September 2018, saying the project had strong fundamentals that supported the detailed optimisation work it was undertaking for the detailed study.
The baseline PFS indicated the company had the potential to become a low-cost vanadium producer in the international marketplace.
Vanadium was trading for about US$29 a pound at the end of November, changing hands for US$29.10 a pound in China and US$28.75 a pound in Europe.
The price is being pushed up by a predicted 10,000 tonne, or 30%, increase in demand for vanadium out of China due to regulatory change in the country where steelmakers were to better reinforce their steels with vanadium from November 1, 2018, to make the steels stronger.
Stricter standards in China
Corresponding stricter environmental standards also mean that Chinese manufacturers are barred from sourcing acid-leached vanadium from the usual go-to domestic source for vanadium in times of short supply.
These small producers use stone-coal processing and leach vanadium from stone coal using acid.
China’s use of tighter environmental standards amid greater demand means producers are looking farther afield, with their hunt having an upwards effect on prices.
The company’s shares last traded at 2.8 cents before the halt.