Summary
Annual report for the financial year 2020 outlines the Company’s strategy for growth amidst COVID-19 pandemic
First stage of extraction tests completed, revealing excellent extraction yields for both oil shale & vanadium. Engineering & Costing studies to occur in FY21
Test work is ongoing at HRL and will continue through December quarter.
Mr Gavin Loyden appointed as the Managing Director during FY20.
Vanadium and oil shale player, QEM Limited (ASX:QEM), released its annual report for the financial year ending 30 June 2020. In the annual report the Company outlined the major growth advancements across the project.
The explorer discussed its proactive response to the COVID-19 pandemic, which enabled the Company to successfully navigate market uncertainties and experience no material impact from COVID-19 during FY20.
QEM highlights that it registered strong progress at the flagship Julia Creek vanadium and oil shale project in Queensland, as it seeks to tap into the burgeoning battery and liquid fuel markets.
QEM said COVID-19 further emphasised the significance of national resilience and self-sufficiency, with the pandemic creating trade and supply chain disruptions across Australia. This has a strong impact on domestic critical minerals supply, which bodes well with QEM’s efforts to emerge as a domestic supplier of vanadium pentoxide and liquid fuels for the Australian market.
Financial Position
As on 30 June 2020, QEM held net assets of $2,509,919 with working capital of $2,444,996 at 30 June 2020. In June 2020, QEM also received a $50,000 cashflow rebate from the Australian Government and with a strong balance sheet, the company is well positioned to fund its intended activities.
R&D Cashback – During the June quarter, QEM received a research and development (R&D) cashback worth $205,000 from the Australian Taxation Office. The Australian Taxation Office had earlier recognised the innovation of R&D activities by QEM at the Julia Creek project. The funds will be utilised towards working capital. FY20 return will be assessed and submitted in due course.
Extraction Test work: Oil Yield doubles, Up to 92% Vanadium extraction yields
QEM collaborated with an independent laboratory company, HRL Technology Group Pty Ltd, to conduct oil shale extraction tests. The majority of the oil extraction tests were conducted during the June quarter of FY20 with the results released in July.
The results confirmed consistent oil yields over 175% against the Modified Fischer Assay oil yields, under varying test conditions. The substantial increase in oil yields is attributable to the addition of a hydrocarbon solvent directly deriving shale oil from the Julia Creek resource, enhancing the cost and efficiency of the solvent across the entire extraction process.
Suggested Read: QEM Advances Dual Commodity Opportunity Following Outstanding Test Results
Additionally, the vanadium extraction yields within the oil shale were also undertaken by HRL revealing excellent extraction efficiencies up to 92% from the shale ash at Julia Creek. QEM plans to conduct further extraction and resource quality optimisation tests in H1 of FY2021.
The engineering and costing activities to develop and assess the beneficiation method will also be undertaken by E2C Advisory Pty Ltd in FY21.
Mineral Resource Upgradation at the Julia Creek vanadium & oil shale project
On 14 October 2019, QEM released a substantial mineral resource upgrade at Julia Creek . The flagship Julia Creek project stretches over 249.6km² in North Western Queensland, Australia.
Following the upgrade of the mineral resource, Julia Creek is now among the largest vanadium deposits in the world. The JORC vanadium resource stands at 2,760Mt with average V2O5 grades of 0.30% including 220Mt in the Indicated & 2,540Mt and Inferred categories. The vanadium- shale oil combination project contains a 3C Contingent Resource of 783 MMbbls of Oil.
Must Read: QEM Releases Investor Presentation Outlining the Dual Commodity opportunity at Julia Creek
Appointment of Managing Director – QEM, in February, appointed Mr Gavin Loyden as the Managing Director, facilitating the incumbent Executive Director Mr David Fitch to take up the role of Non-Executive Director. The au courant audience must know that Mr Gavin Loyden founded the Queensland Energy & Minerals Pty Ltd which was later renamed to QEM Ltd.
Mr Loyden is credited with the early capitalisation of QEM and also supervised the initial exploration program and scoping study, which consequently resulted in the estimation of a large JORC compliant resource.
Interesting Read: QEM’s Julia Project Vanadium Project, an answer to the Energy Storage Puzzle
On 7 October 2020, QEM closed at $0.110 a share, with a market capitalisation of $9.6 million.
All financial information pertains to Australian Dollar unless stated otherwise.
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