The Australian Vanadium Project

The Australian Vanadium Project is one of the highest-grade vanadium projects currently being developed in the world. It was awarded Federal Major Project Status by the Australian Government in September 2019 in recognition of its national strategic significance and State Lead Agency Status by the Western Australian Government in April 2020 due to its importance as a battery and critical metal project.

The Australian Vanadium Project consists of a 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 and a processing plant located near the port city of Geraldton.

The Project consists of 11 tenements covering approximately 260 sq km and is held 100% by Australian Vanadium Limited (ASX: AVL).

Mining Lease Application M51/878 has been granted and covers about 70% of the Mineral Resource, with the balance of the Inferred Mineral Resource located on E51/843, fully owned by AVL.

AVL Released an Updated PFS on 22nd December 2020

The Mineral Resource for the Project was updated on 4th March 2020 (see ASX announcement Total Vanadium Resource at The Australian Vanadium Project Rises to 208 Million Tonnes) and its Ore Reserve was updated in the PFS Update.

The total Mineral Resource is 208.2Mt at 0.74% vanadium pentoxide (V2O5) consisting of:
  • Measured Mineral Resource of 10.1Mt at 1.14% V2O5,
  • Indicated Mineral Resource of 69.6Mt at 0.72% V2O5, and
  • Inferred Mineral Resource of 128.5Mt at 0.73% V2O5.
The Mineral Resource includes a distinct massive magnetite high-grade zone of 87.9Mt at 1.06% V2O5 consisting of:
  • Measured Mineral Resource of 10.1Mt at 1.14% V2O5,
  • Indicated Mineral Resource of 25.1Mt at 1.10% V2O5, and
  • Inferred Mineral Resource of 52.7Mt at 1.04% 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 Ore Reserve is based on the Updated PFS results with 32.1Mt at 1.05% V2O5 comprised of a Proved Reserve of 9.8Mt at 1.08% V2O5 and a Probable Reserve of 22.4Mt at 1.04% V2O5

AVL Released its Updated Pre-Feasibility Study (PFS) 22nd December 2020

The results of the updated PFS (see ASX announcement Technical and Financial PFS Update) 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 confirmed the low, industry comparative, C1* operating costs, with further opportunities identified. Separation of the processing plant from the minesite provides access to cheaper competitive natural gas near Geraldton, a local workforce and FeTi coproduct sales opportunities for 900,000 dry tonnes per annum over the 25 year mine life.

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

The body of work completed in the updated PFS will feed into the Bankable Feasibility Study (BFS).

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

By completing this technical and financial update to the PFS on the Australian Vanadium Project we have taken a major step towards bringing our world class Project into production.  The updated PFS includes detail that allows us to understand and design a long-life, low-cost vanadium pentoxide and FeTi coproduct 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.  The Australian Vanadium Project’s geology and geometallurgy offers a unique opportunity for new vanadium production globally.

– Vincent Algar | Managing Director, Australian Vanadium.

In the table below, NPV8% 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 A$2,370M, with an IRR of 33.1%.  Using US$8.67/lb V2O5, the post-tax NPV of A$542M highlights that the Project is robust and offers attractive returns even at conservative pricing assumptions.

Key Financial Outcomes
Pricing Year 1-5
Pricing Year 6-17
US$7.96/lb V2O5
US$7.96/lb V2O5
US$8.67/lb V2O5
US$8.67/lb V2O5
US$13/lb V2O5
US$8.67/lb V2O5
US$13/lb V2O5
US$13/lb V2O5
pre-tax NPV 8%A$669MA$909MA$1,342MA$2,307M
post-tax NPV 8%A$375MA$542MA$844MA$1,562M
IRR14.8%17.5%27%33.1%
Payback period7.6 years6.6 years4.1 years4.1 years

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 left).

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.

The Australian Vanadium Project – Mineral Resource Estimate
ZoneClassificationMtV2O5Fe %Tio2Sio2Al2O3LOI %
HG 10Measured10.11.1443.913.09.27.53.7
Indicated25.11.1045.412.58.56.52.9
Inferred52.71.0444.611.99.46.93.3
Sub-total87.91.0644.712.29.26.83.2
LG 2-5Measured-------
Indicated44.50.5125.06.827.417.07.9
Inferred60.30.4825.26.528.515.36.7
Sub-total104.80.4925.16.628.016.17.2
Transported 6-8Measured-------
Indicated-------
Inferred15.60.6528.47.724.915.47.9
Sub-total15.60.6528.47.724.915.47.9
TotalMeasured10.11.1443.913.09.27.53.7
Indicated69.60.7232.48.920.613.26.1
Inferred128.50.7333.58.820.211.95.4
Sub-total208.20.7433.69.019.812.15.6

The Australian Vanadium 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).

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