Date: Nov 1, 2018
SmallCapPower | October 31, 2018: Vanadium is an element used primarily to strengthen steel alloys for industrial use but also has important applications as a battery metal. Vanadium-based batteries are known to have longer lifetimes, lower heat levels, and limited risk of combustion when compared to lithium-ion batteries. The price of vanadium has dramatically outperformed other metals since January 2017, appreciating 346% compared to the gains of cobalt (89%), lithium (16%), copper (12%) and gold (2%). In February, the Standardization Administration of China (SAC) introduced new regulations to improve Chinese industrial steel standards, starting in November 2018. When we take into consideration that China produces 200 million Mt of rebar annually, this new development is expected to significantly increase the demand for vanadium and push prices even higher. Today, we have identified four Canadian vanadium stocks that will likely benefit most from an elevated level of vanadium demand. Note: All metrics reflect closing prices as at October 29, 2018.
Prophecy Development Corp. (TSX:PCY) (OTC:PRPCF) – $0.53
Diversified Metals and Mining – Vanadium
Prophecy Development explores and develops minerals and energy products in Canada, the United States, Mongolia and Bolivia. The Company owns 100% interest in the Gibellini project, a large open-pit in Nevada that has the largest Indicated vanadium resource in the United States. A positive Preliminary Economic Assessment at Gibellini estimated average annual production of 9.65 million lbs. V2O5 and a life of mine of 13.5 years. In addition to vanadium, the Company owns 100% interest in the Ulaan Ovoo coal property located in Mongolia where it receives cash as part of a lease agreement.
- Market Cap: $42.3 Million
- 1-Month Total Return: 211.8%
- 1-Year Total Return: 15.2%
- Net Debt (Last 12 Months): -2.1 Million
- EBITDA (Last 12 Months): -3.4 Million
Largo Resources Ltd. (TSX:LGO) – $4.24
Diversified Metals and Mining – Vanadium
Largo Resources is a Canada-based pure vanadium producer operating the Maracas Menchen Mine in Bahia, Brazil. The Maracas Menchen mine is an open-pit mine that began production in August 2014, hosting 19.0Mt of 1.1% V2O5. The mine is guided to produce 9,150 – 10,150t of V2O5 in 2018, with an annual average cost guidance of $5.20/lb. V2O5. Over the next 12 months the Company will be expanding operations at the Maracas Menchen Mine to increase its production capacity by 25%.
