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Australian Vanadium’s pre-feasibility study confirms robust economics for Gabanintha deposit

The company has also reported a maiden ore reserve, adding to the project’s low-risk mineral resource and strong economic potential.

project area
Projected post-tax net present value between US$125 million and US$1.41 billion

Australian Vanadium Ltd (ASX:AVL) has released the pre-feasibility study (PFS) results and a maiden ore reserve for its Gabanintha vanadium deposit in Western Australia.

The results of the PFS indicate a project with a well-defined resource base, robust economics and utilising an industry standard, low-risk method of beneficiation and refining to produce a vanadium pentoxide (V2O5) flake product.

Gabanintha’s maiden ore reserve of 18.24 million tonnes at 1.04% V2O5 comprises of a proved reserve of 9.82 million tonnes at 1.07% V2O5 and a probable reserve of 8.42 million tonnes at 1.01% V2O5.

Gabanintha ore reserve

AVL has envisaged an open pit mining and beneficiation operation producing about 900,000 tonnes per annum of 1.40% V2O5 magnetite concentrate at an average yield of 60%.

The planned V2O5 refinery at the Gabanintha site will have a production rate of about 22.5 million pounds of V2O5 per annum over an initial mine life of 17 years.

Plant layout

Importantly, AVL has estimated an ungeared post-tax net present value ranging between US$125 million and US$1.41 billion, depending on the pricing assumption, indicating a robust project.

Current V2O5 price is trading at US$22/pound with anticipated ongoing supply shortfall until at least 2025.

However, AVL has used a conservative long-term average V2O5 product pricing assumption of only US$8.67/pound for financial modelling.

Key financial outcomes (US$)

AVL managing director Vincent Algar said: “By completing this PFS on Gabanintha we have taken a major step towards bringing our world-class project into production.

“Announcing a maiden ore reserve is a key milestone and further embeds the project’s low-risk mineral resource and strong economic potential.

“The PFS includes detail that allows us to understand and design a long-life, low-cost vanadium pentoxide and cobalt concentrate production facility.

“The company also holds an extensive strike of inferred resource for further definition.

READ: Australian Vanadium offers vanadium expertise to battery industry research centre

“We believe that the project will deliver a world-leading, life of mine mass recovery to concentrate of over 60%. The unique thickness of the Gabanintha high-grade zone adds to its potential.

“AVL shareholders can now have increased confidence in the value of the company, as we embark immediately onto a diamond drill program to provide feed for pilot scale flowsheet validation test work and other DFS (definitive feasibility study) work packages.

“The completed PFS will allow us to confidently engage with strategic partners in 2019, at a time when vanadium supplies are very much in demand.

“Vanadium’s future is bright, with its traditional markets transitioning to higher quality steels and new energy metal markets developing.”

15 Year V2O5 commodity price per pound – inflated to 2018 US$

The body of work completed in the PFS will now feed into the Gabanintha DFS.

Due to the level of detail of many study aspects undertaken in the PFS, several areas are now at an advanced stage and work in 2019 will focus on optimisation and further refinement.

Quick facts: Australian Vanadium Ltd

Price: 0.01 AUD

Market: ASX
Market Cap: $25.66 m

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