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- Australian Vanadium (AVL) completes a bankable feasibility study (BFS) that “confirms” its namesake project in Western Australia’s Murchison province as a critical and battery minerals project supplying global markets
- The proposed project has an estimated 25-year mine life and is expected to produce an average of 11,200 tonnes per annum of high-purity vanadium pentoxide, according to the BFS
- The BFS outlines a pre-tax net present value of $833 million, an internal rate of return of 20.6 per cent and total EBITDA of $4.4 billion across the 25-year period
- Excluding contingencies, Australian Vanadium requires a pre-production capital cost of $604 million
- AVL shares down 7.14 per cent to 9.1 cents
Australian Vanadium (AVL) has completed a bankable feasibility study (BFS) that points to its namesake project in Western Australia’s Murchison province as a potential globally significant vanadium producer.
The company’s proposed project development is based on an open-cut mine, a crushing, milling and beneficiation (CMB) plant and a vanadium processing plant.
Concentrate produced at the CMB will be transported to a vanadium processing plant near Geraldton to be converted into a high-quality vanadium pentoxide. The product will then be sold for further conversion and use in steel and energy storage and catalyst, chemical and defence applications.
The Australian Vanadium project hosts a mineral resource of 239 million tonnes grading 0.73 per cent vanadium pentoxide containing proved and probable ore reserves of 30.9 million tonnes at 1.09 per cent vanadium pentoxide.
According to the BFS, the project has an initial forecast mine life of 25 years and is expected to produce an average of 11,200 tonnes per annum (tpa) of high-purity (99.5 per cent) vanadium pentoxide and 900,000 dry tpa of an iron-titanium co-product.
The BFS showed a pre-tax net present value (NPV) of $833 million and an internal rate of return (IRR) of 20.6 per cent based on a vanadium pentoxide price of US$10.50 (A$13.84) per pound.
Other key financial metrics in the BFS included total earnings before interest, tax, depreciation and amortisation (EBITDA) of $4.4 billion across the 25-year life-of-mine period or EBITDA averaging about $175 million a year and a pre-production capital cost of $604 million, excluding contingencies. Capital payback period has been estimated at 7.3 years.
“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,” Australian Vanadium Managing Director Vincent Algar said.
“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.”
To support development of the project, Australian Vanadium was recently awarded a $49 million grant under the Federal Government’s Modern Manufacturing Initiative (MMI) Collaboration Stream.
“The award of the $49 million MMI grant provides further vindication of the importance and relevance of the Australian Vanadium project and we acknowledge the responsibility placed upon us,” Mr Algar said.
AVL shares were down 7.14 per cent to 9.1 cents at 10:48 am AEST.
