ASX-listed producer Horizon Minerals has updated its open pit ore reserve figures at the company’s Lilyvale vanadium deposit in Queensland to a solid 560 million tonnes grading 0.48 per cent vanadium at a 0.3 per cent cut-off.
A bankable feasibility study has also passed through offtake and alliance discussions with battery and electrolyte manufacturers, onshore refining assessments, project approvals and is headed towards major project status.
The updated pre-feasibility study is based on an initial 20-year mine life representing 18 per cent of the maiden ore reserve.
Feasibility results show a robust set of figures with shallow open pit mining pencilled in to produce 80.4 million tonnes of vanadium oxide ore at a diluted head grade of 0.49 per cent with on-site concentrate production set to bring the grade up to 1.82 per cent.
The overall recovery rate clocks in at 86.1 per cent and is calculated to produce 251,500 tonnes of 98 per cent vanadium oxide commercial grade flakes as its final saleable product. The average annual production is estimated to be 12,700 tonnes vanadium oxide.
The Lilyvale project boasts modest upfront capital costs of $243 million, with operating cash costs coming in at an estimated $8.66 per pound for 98 per cent purity vanadium oxide flake. With current spot prices at $16.44 per pound, the project has a net present value of $1.09 billion with an internal rate of return of an impressive 62 per cent and a payback period of 1.9 years.
Vanadium is an emerging critical mineral that has certainly caught the eye of the Australian Federal Government with its Critical Minerals Prospectus for 2020 listing vanadium as a crucial component of future green energy storage.
Horizon currently holds a 25 per cent interest in the Lilyvale vanadium project with its joint venture partners Richmond Vanadium Technology holding the balance. Both companies have come to an agreement to restructure the asset to combine interests into a dedicated initial public offering vehicle and seek an ASX listing.
Horizon has announced its intention to distribute up to 50 per cent of the company’s shares in the new IPO back to existing shareholders, also affording investors priority to invest into the IPO.
Vanadium prices have been experiencing long-term growth against declining supply in contrast to a huge increase in demand to service burgeoning energy storage markets.
With the mineral even catching the eye of Canberra, with it sudden renewed interest in Australian-produced critical minerals – Horizon and its new IPO listing could be poised to enjoy strong vanadium demand for years to come.
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