“Securing the option over the site is a key part of our development activity. Water supply, land rezoning, transport routes and final approvals over the site and roads are important steps on the pathway to bring the project into production,” says MD.
Australian Vanadium Ltd (ASX:AVL) has moved its strategically placed Western Australian vanadium processing plant closer to development with a one-year extension to its land purchase agreement with the landowner.
AVL signed an option agreement for land to locate its processing plant for the Australian Vanadium Project near the port city of Geraldton, in Western Australia, in October of 2019.
It has since completed water drilling on-site and secured a water source to independently supply the site, with a rezoning application underway as part of the next stage of development.
The company says the project location has garnered strong support from Federal, State and Local governments, offering increased Mid-West region employment opportunities.
Existing gas, water, road and rail infrastructure, access to Mid-West industry services and positive flow on effects to local communities of Mullewa and Geraldton, offer an attractive land package to AVL.
Progressing toward production
Australian Vanadium managing director Vincent Algar said: “AVL is progressing towards production of vanadium products from the Australian Vanadium Project in Western Australia.
“Securing the option over the site is a key part of our development activity. Water supply, land rezoning, transport routes and final approvals over the site and roads are important steps on the pathway to bring the project into production.”
AVL’s vanadium mining project is 40 kilometres south of mining town Meekatharra, in Western Australia.
The company intends to reduce operation costs by crushing, milling and beneficiation the vanadium-bearing magnetite ore at the mine site location and transporting the resulting concentrate to the proposed processing plant outside of Geraldton, where final refinement to high-quality, high-value vanadium products will take place.
Infrastructure-based benefits
AVL says it has a “unique” value proposition resulting from this arrangement in that the company will be able to sell iron titanium co-product generated after extraction of high purity vanadium products.
The potential to sell iron titanium in bulk is provided by the project’s proximity to the coast and port facilities.
A Letter of Intent for the iron titanium co-product has been signed with Shenglong Metallurgy International Pte Limited, the commercial arm of a 12 million tonne per annum steel producer in southern China’s Fangchenggang port.
The physical and infrastructure benefits of the processing plant’s location include:
- Access to cheaper natural gas;
- Capital cost reduction by removing the need to build a gas pipeline to the mine site;
- The opportunity for power at the mine site to have a large component of renewable energy, including a vanadium redox flow battery;
- Significantly reduced mine site water requirements by as much as one third of total project’s water requirements;
- A smaller mine site camp due to reduced numbers of personnel required at the mine site and the ability for processing plant employees to live locally; and
- Reduced construction costs for the processing plant and lower transportation costs of reagents.
Extension agreement
The new agreement provides a further one-year extension of the original options agreement, with the additional option payment of A$28,014 for the extension equivalent to 1% of the purchase price, with half payable in cash and half in AVL shares.
The number of shares issued was based on the volume weighted average share price over the previous five trading days prior to the option renewal date.
The land size is calculated at 1,334 acres, with a purchase price of A$2,100 per acre. All terms in the original option agreement remain valid.
About Australian Vanadium
Australian Vanadium is an emerging vanadium producer developing its high-grade Australian Vanadium Project for the steel and battery markets.
AVL’s namesake project in Western Australia’s Murchison District is currently one of the highest-grade vanadium projects being advanced globally.
It hosts a JORC-compliant 208.2 million tonne resource at 0.74% vanadium pentoxide, within which lies a high-grade 87.9-million-tonne high-grade zone grading 1.06% vanadium pentoxide.
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