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A bankable feasibility study (BFS) into ASX-listed Australian Vanadium’s namesake project, in Western Australia, has estimated a cost of $435-million to develop 24.7-million pound vanadium pentoxide and 900 00 t/y of iron-titanium.
Based on an updated ore reserve of 30.9-million tonnes, at 1.09% vanadium oxide, the project is expected to have a mine life of 25 years, generating yearly earnings before interest, taxes, depreciation and amortisation of A$175-million.
The BFS estimated a pre-tax net present value of A$1.2-billion, assuming a $12/lb vanadium pentoxide price, with the internal rate of return estimated at 20.6% and project pay-back set at 7.3 years.
The DFS estimated C1 operating costs of $4.43/lb vanadium pentoxide, which Australian Vanadium said was competitive with world primary vanadium producers.
“The high standard of feasibility study that the Australian Vanadium team and its consultants have completed is a significant milestone for the company. The positive economic results of the study have occurred in an environment of global inflationary pressure, Covid-19-related impacts and geopolitical instability,” said MD Vincent Algar.
“We have attempted to accommodate potential areas of challenge by building them into our assumptions and remaining agile when efficiency opportunities present. The award of the A$49-million Modern Manufacturing Initiative grant provides further vindication of the importance and relevance of the Australian Vanadium project and we acknowledge the responsibility placed upon us, as all Australians are now stakeholders in our work.
“We are in a period of growing demand for vanadium from both steel and energy storage markets. The robust designs and financials presented in this work firm the pathway to new vanadium production and sets the project apart as the most advanced new primary vanadium project globally. The thorough study process has reduced risks and therefore increased confidence for parties looking to invest in the future of vanadium from a stable mining region.
“The company is now in a position to progress through funding, final engineering, procurement, construction and into production,” said Algar.
Australian Vanadium is currently undertaking regulatory approvals for the project, and will submit a mining proposal to the Department of Mines, Industry Regulation and Safety in May. A final investment decision on the Australian Vanadium project is anticipated in the fourth quarter of 2022, and construction is expected to start in the fourth quarter of 2023, dependent on approvals and financing.