Technology Metals Australia Limited (ASX: TMT) (“Technology Metals” or the “Company”) is pleased to announce the results of the definitive feasibility study (“DFS”) on its 100% owned Gabanintha Vanadium Project (“GVP” or the “Project”) in Western Australia. The DFS is based on the development of an open pit mining operation, crushing, milling, magnetic separation, salt roasting-water leaching and chemical process plant to produce high purity (+99%) vanadium pentoxide (V2O5 ) product for use in the steel, specialty alloy, chemical and battery markets.
EXECUTIVE SUMMARY
ROBUST PROJECT PARAMETERS
1. Project metrics compare very favourably to global vanadium producers with lowest quartile life of mine cash costs of US$4.04/lb V2O5.
2. Industry leading end-to-end vanadium recovery of 77% on fresh massive ore with class leading 71% mass recovery to magnetic concentrate.
3. Average annual production of 27.9 Mlb V2O5-would establish Gabanintha as the World’s largest primary vanadium producer.
4. Critical pilot scale kiln roast test work completed by industry leading kiln supplier, FLSmidth Inc .
5. Average feed grade of +1.0% V2O5 for first 12 years-one of the World’s highest grade operations.
6. Conservative +two-year throughput and recovery ramp up assumptions
STRONG ECONOMICS
1. Life of mine EBITDA estimate of A$4.1 Bn.
2. Estimated A$1.09 Bn free cash flow generated in the first six years of operation.
3. Pre-tax NPV 8% of US$924m (A$1,320m) and IRR of 34% at average LOM pricing of US$10.88/lb V2O5 .
4. 15-year historical average price of US$8.78/lb* V2O5 delivers pre-tax NPV 8% of US$464m (A$663m) and IRR of 21%.
5. Pre-production process plant capital of US$318m (A$454m) with 3.2 year payback.
OFFTAKE STRATEGY WELL PROGRESSED
1. MOU signed with CNMC Ningxia Orient Group Company Ltd, a controlled subsidiary of China
Nonferrous Metal Mining (Group) Co. Ltd.
2. Discussions indicate a high level of interest in securing supply of V2O5 from a primary mining source
in a stable jurisdiction such as Western Australia.
STRUCTURAL CHANGE IN VANADIUM INDUSTRY
1. Demand growth driven by China’s enhanced quality standards for construction steel requiring
increased consumption of vanadium.
2. Supply impacted by industry consolidation / rationalisation and Chinese environmental restrictions.
3. Vanadium market deficit requires new primary production to support demand growth.
NEXT STEPS
1. Progress offtake and finance discussions.
2. Advance environmental approvals and Mining Lease grant.
3. Commence FEED study.
4. Target investment decision by beginning of Q2 2020.
Managing Director Ian Prentice commented: “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.
Delivery of this study is a key milestone in progression of discussions with prospective development partners that the Company has engaged with over the past 12 to 18 months.”
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