Gabanintha Vanadium

3D model of Gabanintha Vanadium Mine in Western Australia

The Gabanintha vanadium project consists of the Gabanintha high-grade V-Ti-Fe deposit located in the Murchison Province approximately 43kms south of the mining town of Meekatharra in Western Australia and 740km north-east of Perth.

Gabanintha Map

The Project consists of 11 tenements covering approximately 260 sq km and is held 100% by Australian Vanadium Limited. Mining Lease Application M51/878 is currently awaiting approval and covers about 70% of the Mineral Resource, with the balance of the Inferred Mineral Resource located on E51/843, owned 100% by AVL.

 

Regional location map of the Gabanintha vanadium deposit in Western Australia.

AVL’s Gabanintha vanadium project is one of the highest grade vanadium projects currently being developed in the world.

The Mineral Resource for Gabanintha was updated on 28th November 2018 and a maiden Ore Reserve was released on 19th December 2018.

The total Mineral Resource is 183.6Mt at 0.76% vanadium pentoxide (V2O5) consisting of:
  • Measured Mineral Resource of 10.2Mt at 1.11% V2O5,
  • Indicated Mineral Resource of 40.7Mt at 0.66% V2O5, and
  • Inferred Mineral Resource of 132.7Mt at 0.77% V2O5.
The revised Gabanintha Mineral Resource includes a distinct massive magnetite high-grade zone of 96.7 Mt at 1.00% V2O5 consisting of:
  • Measured Mineral Resource of 10.2Mt at 1.11% V2O5,
  • Indicated Mineral Resource of 12.1Mt at 1.05% V2O5, and
  • Inferred Mineral Resource of 74.5Mt at 0.97% V2O5.

The Mineral Resource includes an estimation of cobalt, nickel and copper:

  • Initial Inferred Mineral Resource is 14.3 Mt at 208ppm Co, 666ppm Ni and 217ppm Cu and 0.16% Sulphur*

AVL’s Maiden Ore Reserve is 18.24Mt at 1.04% V2O5 comprised of a Proved Reserve of 9.82Mt at 1.07% V2O5 and a Probable Reserve of 8.42Mt at 1.01% V2O5

On 19th December 2018 AVL released its pre-feasibility study (PFS).

The results of the PFS build upon the initial base case (see ASX announcement 26 September 2018 Gabanintha Presents Robust Base Case for PFS) and 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.  Capital and operating cost estimates have been developed to the level of accuracy of ±25% and include mine and processing circuit designs, a detailed financial model and supporting bodies of work.  The additional work has identified a reduction in capital costs and confirmed the low, industry comparative, C1* operating costs with further opportunities identified.

The Project is based on a proposed open pit mine; crushing, milling and beneficiation plant (CMB) and refining plant for final conversion and sale of high quality vanadium pentoxide (V2O5) for use in steel, specialty alloys and energy storage markets. The PFS results highlight AVL’s potential to become a new low-cost vanadium producer.

The body of work completed in the PFS will feed into the Definitive Feasibility Study (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.

*C1 costs are direct costs incurred in mining and processing (labour, power, reagents, maintenance and consumables) including by-product credits.

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.  Given the cyclical nature of the vanadium markets, it’s essential that all technical aspects are well understood and the capital and operating costs minimised.  Gabanintha’s geology and geometallurgy is emerging as offering a unique opportunity for new vanadium production globally.

– Vincent Algar | Managing Director, Australian Vanadium.

In the table below, NPV and IRR are reported at various V2O5 pricing assumptions.

NPV and IRR are reported at various V2O5 pricing assumptions. Assuming a V2O5 price of US$13/lb, pre-tax NPV is US$912M, with an IRR of 27.2%.  Using US$8.67/lb V2O5, the post-tax NPV of US$125M highlights that the Project is robust and offers attractive returns even at conservative pricing assumptions.

Key Financial Outcomes (US$)
Pricing Year 1-5
Pricing Year 6-17
$8.67/lb V2O5
$8.67/lb V2O5
$13/lb V2O5
$8.67/lb V2O5
$13/lb V2O5
$13/lb V2O5
$20/lb V2O5
$20/lb V2O5
pre-tax NPV 8%$230M$444M$912M$2,013M
post-tax NPV 8%$125M$280M$616M$1,410M
IRR12.4%19.7%27.2%47.5%
pre-tax UDCF$1,232M$1,634M$3,166M$6,292M
post-tax UDCF$867M$1,148M$2,221M$4,409M

The mineral deposit consists of a basal massive magnetite zone (10m – 15m in drilled thickness), containing greater than 0.8% V2O5, overlain by up to five lower grade mineralised magnetite banded gabbro units between 5 and 30m thick, separated by thin waste zones (<0.3% V2O5). Vanadium mineralisation is found in the basal massive magnetite horizon, as well as the lower grade banded magnetite gabbro horizons overlying the main high grade unit. (See typical cross section below).
The sequence is overlain in places by a lateritic domain, a transported domain (occasionally mineralised) and a thin barren surface cover domain. The deposit is affected by a number of regional scale faults which break the deposit into a series of kilometre scale blocks. The larger blocks show relatively little sign of internal deformation, with strong consistency in the layering being visible in drilling and over long distances between drillholes.

Gabanintha Project – Mineral Resource estimate by domain and resource classification using a nominal 0.4% V2O5 wireframed cut-off for low grade and nominal 0.7% V2O5 wireframed cut-off for high grade (total numbers may not add up due to rounding).
ZoneClassificationMtV2O5Fe %Tio2Sio2Al2O3LOI %
HG 10Measured10.21.1142.712.610.28.03.9
Indicated12.11.0543.811.910.67.63.5
Inferred74.50.9742.111.211.67.6 3.4
Sub-total96.71.0042.411.411.37.73.5
LG 2-5Measured-------
Indicated28.60.5024.66.927.517.98.6
Inferred53.90.4925.36.727.516.47.3
Sub-total82.50.4925.16.827.516.97.7
Transported 6-8Measured-------
Indicated-------
Inferred4.40.6528.27.224.716.78.5
Sub-total4.40.6528.27.224.716.78.5
TotalMeasured10.21.1142.712.610.28.03.9
Indicated40.70.6630.38.322.514.87.1
Inferred132.70.7734.89.218.511.55.1
Sub-total183.60.7634.39.218.912.15.5
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