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Australian Vanadium signs option agreement to locate processing plant near Geraldton, WA

New location of processing plant will reduce remote site capex at Meekatharra mine site, including removing the need for a gas pipeline to site

Australian Vanadium Ltd - Australian Vanadium signs option agreement to locate processing plant near Geraldton, WA
Processing plant 3D model

Australian Vanadium Ltd (ASX:AVL) has signed an option agreement over a site inland from Geraldton, which has been identified as a potential location for its vanadium processing plant.

The land area proposed to be acquired is about 1,334 acres, at a purchase price of $2,100 per acre.

Background

AVL’s pre-feasibility study (PFS) included a series of trade-off studies, one of which highlighted the potential to locate the processing plant for the Australian Vanadium Project closer to the existing gas infrastructure, to take advantage of reduced energy costs.

In total, 11 alternate locations were considered, including coastal WA and locations between Meekatharra and Geraldton.

The final site selection process has narrowed the preferred location to land which is inland from Geraldton and west of Mullewa, to take full advantage of the available workforce, industry support and existing road, rail, water and gas infrastructure.

Proposed location of processing plant

The relocation of the processing plant would reduce AVL’s capital and operating expenditure for gas supply for the project as it would be unnecessary to build a new gas pipeline from the nearest existing pipeline infrastructure, either the Mid-West Gas Pipeline in Mount Magnet or from the Dampier-Bunbury Natural Gas Pipeline to the mine site location.

AVL has commenced a detailed engineering study for the processing plant relocation, which will define the associated costs related to the move.

Trade-offs between operating expenses, logistics and transport costs, plant capex and associated infrastructure costs will inform AVL’s final decision to relocate.

Encouraging local stakeholder support

AVL managing director Vincent Algar said: “Locating the processing plant near Geraldton rather than at the mine site presents a number of opportunities for AVL and our local communities.

“Our goal is to safeguard the business through all vanadium price cycles, by achieving lowest quartile costs of production.

“Moving the processing plant component could be an important step to achieve that.

“We have already started to engage with local stakeholders in the Geraldton region and we are finding great enthusiasm for the processing plant project and the jobs it will bring to this important strategic regional centre.

“Support from all levels of government has been very encouraging.

“The company will now analyse the selected option in more detail, including working with the local community, completing technical and commercial reviews and commencing the environmental and regulatory approval processes, to allow a final decision about the best location for the processing plant to be made.”

Quick facts: Australian Vanadium Ltd

Price: 0.009 AUD

ASX:AVL
Market: ASX
Market Cap: $22.98 m
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