Small cap vanadium developer Technology Metals Australia (ASX: TMT) has released impressive Definitive Feasibility Study results which have identified potential life-of-mine EBITDA totalling AUD $4.1 billion*.
“The very high quality Gabanintha Vanadium Project DFS has generated an outstanding result delivering lowest quartile operating costs over a long initial mine life at a scale that will make the Project the largest single primary vanadium producer in the World,” said Managing Director, Ian Prentice.
With Technology Metals Australia entering the day with a market cap of AUD $17 million, the DFS results further identified a project pre-tax net present value of AUD $1.32 billion if the average life-of-mine vanadium pentoxide price holds at US $10.88/lb.
These assumptions were drawn upon a 15-year historical average vanadium price of $8.78/lb but factors in the impending battery mineral shortage which is expected to see a potential rise in battery mineral prices over the next decade.
Key to the sizeable project value and earning potential is the project’s low operating cost where high feed grades and low operating expenses have the project forecast to produce Vanadium at an average cost of US $4.04/lb over the 16 year mine life.
Both of these were notable improvements on the Company’s June 2018 Pre-Feasibility Study which had previously identified an average production cost of $4.27/lb over a 13 year mine life.
Should the project progress to the next stage, the Company still requires environmental approvals and the securing of a Mining Lease as well as commence financing initiatives to build a pre-production process plant at a cost of AUD $454 million with a 3.2 year payback period.
Vanadium has gained notable attention in recent years as part of the clean energy trend where Vanadium is being mooted as a market disrupter to lithium-ion batteries as long-life energy storage solutions.
Vanadium Redox Batteries (VRBs) have been identified to have rapid recharge and discharge response times and the uniqueness of being a one-element battery with both the anode and cathode.
The Gabanintha Vanadium Project is located in Meekatharra, Western Australia and approximately 500km north-east of the Port of Geraldton. As per their most recently quarterly report, Technology Metals Australia had $1.83m of cash in the bank.
*The Ore Reserves and Mineral Resource Estimate underpinning the DFS have been prepared by Competent Persons with Competent Person’ Statements. Please refer to the ASX Announcement released on 21 August 2019 “Gabanintha Vanadium Project Definitive Feasibility Study”.
Dalian, China where Rongke Power is developing a 200MW/ 800MWh battery using approximately 6,960 tonnes of Vanadium Pentoxide.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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