$US354m Gabanintha price tag spooks Australian Vanadium investors

Date: Dec 19, 2018

Australian Vanadium has put a $US354 million ($493 million) price tag on developing its high-grade Gabanintha project near Meekatharra.

Releasing its pre-feasibility study on an open pit and processing plant this morning, the Perth-based hopeful revealed a maiden ore reserve of 18.24 million tonnes that will produce 900,000 tonnes a year of 1.40 per cent vanadium pentoxide at an average yield of 60 per cent.

An on-site refinery will turn out about 10,206tpa of the steel-hardening ingredient over an initial mine life of 17 years.

But the price tag, only a few million dollars shy of a $US360 million estimate released in September, has again spooked investors, with the company’s shares shedding almost 18 per cent in early trade to 2.3¢.

They had regained some ground by 11.15am but were still down 14.3 per cent.

Managing director Vincent Algar said the study was a major step towards bringing the project online.

“Announcing a maiden ore reserve is a key milestone, and further embeds the project’s low-risk mineral resource and strong economic potential,” Mr Algar said.

“The PFS includes detail that has enabled us to understand and design a long-life, low-cost vanadium pentoxide and cobalt concentrate production facility for one of the world’s largest and most significant undeveloped resources of vanadium.”

The project details come as prices for the commodity continue to track at multi-year highs, hitting $US23.90/lb yesterday after a stellar rally over 2018.

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