Near-term vanadium play Pursuit Minerals (ASX:PUR) has a two-stage production strategy.
To start with, the company will produce high grade vanadium magnetite concentrates from its Airijoki project in Sweden and then sell those concentrates to global markets, focussing initially on the steel industry.
Stage 2 involves becoming a key supplier into Europe’s emerging battery storage markets.
For a junior explorer like Pursuit and its investors, Stage 1 represents a cheaper, quicker path to production and first cashflow.
Pursuit are eyeing steel manufacturers in Sweden as well as the wider European and Russian markets as potential customers — but the largest market for this concentrate is in China, says managing director Jeremy Read.
“For the first few years of our Airijoki project in Sweden we plan to sell a high-grade vanadium magnetite concentrate into the steel industry,” Read told Stockhead.
“There’s a well developed market in China for buying and selling vanadium magnetite concentrates, and our material would contain 3 to 4 times as much vanadium as the average traded vanadium magnetite concentrate in China,” he says.
World beating grades
There are only a few projects in the world which can deliver a vanadium magnetite concentrate which can compare to Airijoki – and one of those is Pursuit’s project in Finland, Koitelainen Vosa.
In February, the company defined a 116.4 million tonne resource at Koitelainen Vosa, comprising 5.8 million tonnes of magnetite grading 2.3 per cent V2O5 in magnetite concentrate.
This is outstanding. Only the Maracas mine in Brazil produces a higher-grade vanadium magnetite concentrate.
This was followed by a 5.9 million tonnes resource for Airijoki, grading 1.7 per cent V2O5 in magnetite concentrate. Anything above 1.5 per cent is considered high-grade.
This was based on a 13.3 per cent mass recovery of magnetite concentrate, but since then, metallurgical test work has boosted this to 22.2 per cent. This is a significant improvement which could positively impact the already rock-solid project economics.
Read says getting into to production and selling magnetite concentrate for the first couple of years provides Pursuit with important cash flow “and the ability to fund the further feasibility studies into the Stage 2 downstream processing.”
Globally, the VRFB market is expected to grow from US$230 Million in 2018 to US$946 Million by 2023.
For Pursuit, the goal is to seize the opportunities being presented by the emerging energy storage revolution in Europe.
It’s Stage 2 development involves building a downstream processing plant to produce vanadium pentoxide flake to sell into European battery markets.
That industry is developing quickly, Read says.
“Europe is really looking around at the moment saying, ‘we don’t really want to be buying all of our vanadium from Russia and China – let’s get it internally’,” he says.
“But where is it going to come from?
Pursuit’s vision is not be a single mine, single project company, but to have multiple mines feeding into a centralised processing plant, says Read.
“All of those studies will take another year to complete, but it’s better to do all of that when you’re in production already,” he says.
Next Steps
At Airijoki, Pursuit has just received county approval for a 68 hole, 9815m infill drilling program.
The objective of the drilling, which will kick off mid to late September 2019, is to convert the current Inferred Resource into the higher confidence Measured and Indicated JORC classifications.
This drilling underpins the Airijoki Feasibility Study for a 3.5 million tonnes a year Stage 1 project producing high-grade vanadium magnetite concentrates.
Read says Pursuit has now received approval from the County Administration Board for two major drilling programs within the last eight months – which shows the speed that projects can be progressed in northern Sweden.
“We are appreciative of the CAB’s quick assessment of our planned infill drilling program at Airijoki,” he says.
“We can now accelerate our preparations for the infill drilling program and planning for the commencement of the Feasibility Study.”
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