ASX-listed Kalgoorlie gold producer, Horizon Minerals, has released an encouraging pre-feasibility study on its joint-ventured Richmond-Julia Creek vanadium project in north-west Queensland that envisages an initial 20-year mine life and development CAPEX of US$157.4 million.
The company says its pre-feasibility study, or “PFS” points to a “financially viable” project predicated on the exploitation of the higher-grade Lilyvale deposit.
A successful infill drilling program late last year comprising 333 aircore holes totalling 7,817m resulted in an upgraded mineral resource estimate for Lilyvale of 560 million tonnes grading 0.48 per cent vanadium pentoxide for 2.6 million contained tonnes.
Coinciding with the completion of the PFS, Perth-based Horizon and its joint venture partner Richmond Vanadium Technology, or “RVT” have now put out maiden open-pit ore reserve numbers for the Lilyvale deposit of 459.2 million tonnes going 0.49 per cent vanadium pentoxide for 2.25 million contained tonnes.
Key PFS metrics across the forecast mine life of 20 years include low-strip-ratio open-pit mining of 81.2 million tonnes of ore at an average annual rate of 4.06 million tonnes per annum processed at an average grade of 0.49 per cent vanadium pentoxide.
The life-of-mine production has been predicted at around 15.8 million tonnes of 1.82 per cent vanadium pentoxide concentrate at an average annual rate of about 790,000 tonnes a year.
Importantly the stripping ratio is uber low at just 1.07.
The concentrate is anticipated to be produced on site, with the product then railed to the Port of Townsville and shipped to China for refining into 98 per cent vanadium pentoxide commercial-grade flake at an average annual rate of about 12,700 tonnes a year or 254,000 tonnes in total.
A possible refining plant at Richmond-Julia Creek was deemed too CAPEX-heavy at US$218.3 million compared with stationing a new one offshore in China for US$72.1 million, which together with a US$51.4 million concentrator plant will speak for the bulk of the US$157.4 million CAPEX.
Operating cash costs have been estimated at US$5.53 per pound of 98 per cent vanadium pentoxide flake. At the current spot price of US$7.10 per pound of 98 per cent vanadium pentoxide flake, the PFS suggests a net present value before tax of US$150 million for the project using an 8 per cent discount rate.
According to Horizon, potential offtake partners have already indicated significant interest in buying the finished product during initial discussions.
RVT is partway through earning an overall 75 per cent interest in the Richmond-Julia Creek project from Horizon that entails a second-stage expenditure commitment of A$5 million over three years to March next year inclusive of a definitive feasibility study.
RVT has done an excellent job demonstrating the quality and viability of this world-class oxide vanadium resource. The Lilyvale deposit alone can provide globally significant supply for the next 100 years and easily expand production to meet the increasing demand from both the steel and emerging battery storage markets.
With this increase in demand in coming years and the reduction in the supply of vanadium from steel slags, we see the vanadium price continuing its steady climb and look forward to advancing the project to DFS level and commencing commercial production discussions with interested offtake partners.
Horizon says the immediate next steps for Richmond-Julia Creek include determining the optimal power supply for the project along with progressing environmental studies and the preparation of documents for Government permitting and approvals.
The JV also plans to continue discussions with potential offtake partners and examine financing options.
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