Strategic Rallies On Finland Vanadium Deal

On Monday February 10, there has acquired a large vanadium-iron-titanium deposit in Finland. In a press release, the company said the Mustavaara deposit is located 75 km southwest of the city of Kuusamo and was mined by the Finnish state company Rautaruuki Oy between 1976 and 1985.

The vanadium produced from Mustavaara and the nearby Otanmaki deposit accounted for approximately 10% of the world vanadium production at the time. Mining was suspended due to adverse market conditions and the processing facilities were dismantled in 2001.

“We view this as a unique opportunity to acquire a large-scale brownfields historical resource and a project that was taken to a pre-feasibility study level in 2012,” said Strategic CEO Scott Hicks. “Mustavaara has the potential to supply a growing vanadium redox battery market as well as provide substantial benefits to the Finnish economy,” he said. “The team looks forward to building out our portfolio of assets in Finland over the coming years.”

Strategic advanced on the news, rising 11.5% or $0.035 to 34 cents. The shares are currently trading in a 52-week range of 24 cents and 70 cents.

Strategic Resources is a Vancouver-based exploration and development company with a focus on vanadium and other metals that are necessary for an electrified economy. The company’s portfolio includes the Silasselka and Akanvaara projects in Finland, both of which have been the target of past drilling. The company also has applications pending for 11,700 hectares of prospective vanadium ground in Peru.

Vanadium is growing in importance for key industrial manufacturing sectors, notably in steel and renewable energy. More than 85% of the world’s vanadium is used in steel manufacturing applications.

Its importance to the energy sector is also growing rapidly with more than 10% of vanadium production used in energy storage where its substantial cost and performance benefits make it an alternative choice to lithium ion in several areas.

Vanadium redox batteries are a relatively small market at present but have the potential to grow for two reasons. The first is overall growth in the grid sector storage market to smooth out energy production for renewables. The second is that the technology is superior in numerous ways for grid scale storage compared to its main competitor lithium ion batteries.

Strategic said prices peaked in 2018 when China increased its standards for the strength of rebar, which boosted demand for vanadium. “Although prices have fallen since then, we believe this will provide a long-term structural increase in vanadium demand,” Strategic said.

Strategic said it has successfully applied for reservations over the Mustavaara mine area. It has also signed a definitive agreement with the bankruptcy estate of Ferrovan Oy to acquire all of the intellectual property, core samples, and related storage facilities.

The company said closing of the agreement will be subject to certain conditions, with the main condition being the granting of fully valid reservations from the Finnish mining authority, Tukes. Strategic expects that this should occur in and around the second quarter of 2020.