Australian Vanadium Limited (ASX:AVL) has signed a memorandum of understanding (MoU) to co-operate with Westgold Resources Limited (ASX:WGX) on supply of life of mine water for The Australian Vanadium Project south of Meekatharra in WA.
Westgold’s nearby Meekatharra gold operations comprise several active and inactive mines and continuous inflows into several active and inactive pits result in water surplus.
The MoU establishes the collaborative environment that AVL requires to thoroughly investigate and design the diversion and delivery of water as discussed in its pre-feasibility study (PFS).
"De-risking a key project requirement"
Australian Vanadium managing director Vincent Algar said: “Westgold Resources has a known quantity and quality of water flowing into open pits close to The Australian Vanadium Project.
“Signing the MOU to deliver this water to our project ensures we are de-risking a key project requirement and advancing an essential aspect of the project’s environmental approvals process.
“AVL looks forward to developing the relationship with Westgold further as we move to become significant mining neighbours in the region.”
The MoU paves the way for the company and Westgold to enter into a formal and binding water access agreement within six months, subject to statutory conditions.
Potential benefits of the MOU include:
- Shortening of the environmental approvals process;
- Reduced groundwater and environmental impacts;
- Substantial de-risking of the water volume and quality requirements; and
- The opportunity to receive funding assistance from NAIF (Northern Australian Infrastructure Fund) during construction by meeting their condition to provide community benefits.
Groundwater drilling continues at The Australian Vanadium Project in order to ensure the extent of groundwater resources near the project are fully understood.
In May the company updated the resource estimate for the Nowthanna Hill uranium deposit to JORC 2012 standards.
Using a 250ppm vanadium pentoxide cut-off the project has an inferred resource of 3.60 million tonnes at 337 ppm vanadium pentoxide.
Using a 200ppm triuranium octoxide cut-off the project has an inferred resource of 4.73 million tonnes at 404ppm triuranium octoxide.