Horizon Minerals Limited (ASX:HRZ) Positive Feasibility Results For Richmond Vanadium Project

 Horizon Minerals Limited (ASX:HRZ) is pleased to announce the results of the Pre-Feasibility Study (“FS”, “PFS” or “Study”) of the Richmond-Julia Creek vanadium project located in Central North Queensland).
– Positive Pre-Feasibility Study completed for the Richmond – Julia Creek vanadium joint venture project, 500km by rail west of the Townsville Port in North West Queensland
– Mineral Resource estimate for the Lilyvale deposit stands at:
o 560Mt grading 0.48% V2O5 for 2.6Mt V2O5 at a 0.30% lower cut-off
– Maiden open pit Ore Reserve at the Lilyvale deposit of:
o 459.2Mt at 0.49% V2O5 for 2.25Mt of contained V2O5 product
– Pre-Feasibility Study based on an initial 20 year life demonstrating a financially viable project with the following key metrics:
o Shallow open pit mining producing 81.2Mt at a fully diluted grade of 0.49% V2O5 for 15.8Mt of 1.82% V2O5 concentrate with concentrate production on site
o Refining overall recovery at 86.1% produces 254,000 tonnes of 98% V2O5 commercial grade flake with average annual production of 12,700t V2O5
o Modest up-front capital costs of US$157.4m and operating cash costs of US$5.53/lb of 98% V2O5 flake
o At current spot price of US$7.10/lb V2O5, project generates NPV8% of US$150.0m
– Discussions with potential offtake partners advanced with significant interest received
– Preliminary Environmental Assessment (PEA) Report completed with the joint venture partners reviewing costs and timing for advancement of the Definitive Feasibility Study
Commenting on the Pre-Feasibility Study outcomes, Horizon Managing Director Mr Jon Price said:
“Our Joint Venture partner RVT has done an excellent job demonstrating the quality and viability of this world class oxide vanadium resource. The Lilyvale deposit alone can provide globally significant supply for the next 100 years and easily expand production to meet the increasing demand from both the steel and emerging battery storage markets.”
“With this increase in demand in coming years and the reduction in the supply of vanadium from steel slags, we see the vanadium price continuing its steady climb and look forward to advancing the project to DFS level and commencing commercial production discussions with interested offtake partners.”
The Richmond – Julia Creek Vanadium Project is located approximately 50kms north-west of Richmond in North West Queensland. Richmond is a regional service town of 520 people situated 500kms by road to the west of Townsville and 400kms east of the mining town of Mt Isa (Figure 1).
In March 2017, the Company entered a strategic development Joint Venture (“JV”) with Richmond Vanadium Technology Pty Ltd (“RVT”). The JV covered Horizon’s 100% interest in the Richmond vanadium project comprising 1,550km2 of Cretaceous Toolebuc Formation (Figure 2) 1.
RVT completed the initial earn in period (A$1 million to earn 25% interest) in March 2018 and have commenced the second stage expenditure commitment of A$5 million over 3 years inclusive of a Feasibility Study to earn a further 50% interest in the project.
The Pre-Feasibility Study 2 focussed on the higher grade Lilyvale deposit (Figure 2) following the successful infill drilling program in late 2019 comprising 333 aircore holes for 7,817m which resulted in the updated JORC 2012 Mineral Resource estimate of 0.56Bt grading 0.48% V2O5 for 2.6Mt V2O5 at a 0.30% lower cut-off 3. The Mineral Resource update resulted in improved grades over the previous Mineral Resource Estimate, and importantly led to 76% of the Mineral Resource upgraded to the Indicated JORC Category for estimation of maiden Ore Reserves. In addition, the drilling enabled a large metallurgical sample representative of the orebody for additional concentration and downstream processing testwork to also feed into the Pre-Feasibility Study.
Key Outcomes of the Feasibility Study
The key Study outcomes for the project are included in Table 1 below: The estimated Ore Reserve, which constitutes 100% of the production target, has been prepared by competent persons in accordance with JORC Code 2012.1
8.4Mt of total rock is mined per annum, generating 4.06Mt of ore mined from the open pit for concentration. This mining rate yields a nominal mine life of over 100 years at Lilyvale. For the purposes of the economic analysis in the feasibility, a mine life of only 20 years is considered.
The PFS has an annual rate of production of 790,000 tonnes of concentrate, producing 12,701tonnes of 98% V2O5 flake. Operating costs of US$5.53 include mining, administration, concentration onsite, transport and refining offshore. Capital costs of US$157.4m include construction of the concentrator via EPCM inclusive of 20% contingency, in addition to a power station, railway siding, bores, administration and accommodation facilities, and an offshore refining plant. Mining capital is provided by the contractor and amortised into the mining rate. Consideration for refining onshore was examined in the PFS, costing US$218.3m for the refining plant compared to US$72.1m in China, therefore was discounted as an option due to a less favourable NPV in comparison to refining offshore, in addition to significantly de-risking the project with a much lower overall capital cost.
Mineral Resource Estimate
The Project mineralisation is located within marine sediments of the early cretaceous Toolebuc Formation, a stratigraphic unit that occurs throughout the Eromanga Basin in Central-Northern Queensland. Due to the superior grades of the Lilyvale deposit, it was determined to be the most likely to be economically successful and was therefore infilled to improve the classification of the exiting resource with a successful aircore programme completed in late 2019.