Vanadium plays rush to fill gaps on decade price high
Date: Sep 27, 2018
Australian Vanadium yesterday released robust economic projections as part of the early findings of a pre-feasibility study of its Gabanintha project as the price of the steel-hardening commodity hit new decade highs.
But investors sold down the stock, spooked by a $US360 million price tag on the development near Meekatharra, which is targeting annual production of 10,100 tonnes of vanadium pentoxide over an initial 17-year mine life.
Managing director Vincent Algar also conceded the company was slightly late on the delivery of its study, the full version of which is now expected in December.
“It’s a big number, but that’s what it costs,” Mr Algar said.
“We haven’t been trying to hide that at all.”
However, he said there was “contingency” in the estimate, which provided scope to reduce the figure, along with estimated operating costs of $US4.13/lb.
Yesterday’s announcement gave Gabanintha a net value of $US191 million and an internal rate of return of 14.5 per cent based on a vanadium price of $US8/lb. That compared with an NPV of $US2.37 billion and an IRR of 70 per cent on a price of $US20/lb.
