Australian Vanadium confirms cost-competitive base case scenario for Gabanintha project

Australian Vanadium ASX AVL Gabanintha project pre-feasibility study
Australian Vanadium has released the first part of its blueprint for a $US360m open pit vanadium mine, refinery and cobalt concentrate production facility at Gabanintha.

Emerging junior Australian Vanadium (AVL) has developed an initial production scenario for its high-grade Gabanintha vanadium project in Western Australia’s Murchison province, with average operating expenses competitive with the world’s lowest quartile of producers.

The base case scenario is part of an ongoing pre-feasibility study for the project, and demonstrates robust project fundamentals, competitive product costs and financials, with further optimisation potential.

It is centred around a proposed open pit mine 2700 metres in length, 380m wide and 220m deep, designed as a series of nested pits within the ultimate pit shell and mined in 100m north-south strips.

The scenario will also include a crushing, milling and beneficiation plant and a refining plant for final conversion and sale of high-quality vanadium pentoxide for use in steel, specialty alloys and developing energy storage markets.

While a base metals circuit will extract an estimated 1500 tonnes per annum of sulphide concentrate containing cobalt, nickel and copper, Australian Vanadium confirmed the viability of Gabanintha is not dependant on the mining and sale of these products.

Project economics

The Gabanintha discovery hosts a JORC combined measured and indicated mineral resources of 34.1 million tonnes at 0.77% vanadium pentoxide in low and high-grade domains containing 263,000t vanadium pentoxide.

With an estimated capital cost of US$360 million, the proposed mining operation will produce approximately 900,000 tonnes per annum of magnetic concentrate at a grade of 1.39% vanadium pentoxide.

The planned onsite refinery will have a production rate of approximately 10,100tpa of vanadium pentoxide over an initial mine life of 17 years based on existing measured, indicated and a portion of the inferred mineral resources.

There is potential to extend operations along strike for an additional 8 kilometres which could also extend the mine’s life.

Average operating expenses are estimated at US$4.13 per pound vanadium pentoxide equivalent (+/- 35%) and are considered competitive with some of the world’s lowest cost vanadium producers.

Average mass yield from the concentrator is estimated at 62.1% for the life of mine, which is “exceptionally high” and allows allowing for a compact and effective crushing and milling operation.

Long-life, low-cost

Managing director Vincent Algar said the initial findings have been encouraging and highlight the company’s potential to become a long-life, low-cost vanadium producer.

“It is essential that all technical aspects are understood [through this pre-feasibility process] and the capital and operating costs minimised, given the cyclical nature of the vanadium markets,” he said.

“This will contribute greatly to a robust business case which will allow continuity of our operation across a range of business conditions.”

Mr Algar said the next stage of the study will include determining options to improve project financial metrics and establishing a final operational design, where capital and operating expenditures will be estimated to within +/- 25%.

He said the final study is on schedule and budget for completion by year end.

Orebody characteristics

Metallurgical testwork is continuing to define ore characteristics and vanadium recoveries of the Gabanintha mineralisation, located approximately 43km south of the mining town of Meekatharra.

The orebody hosts a vanadium-bearing oxidised massive titaniferous magnetite occurring near surface along its entire length, and will be one of the first targets to be mined.

The deposit consists of a basal massive magnetite zone up to 15m in drilled thickness and containing greater than 0.8% vanadium pentoxide.

It is overlaid with up to five lower-grade mineralised magnetite-banded gabbro units with a maximum thickness of 30m, separated by thin waste zones of less than 0.3% vanadium pentoxide.

Vanadium mineralisation is found in the basal massive magnetite horizon, as well as the lower-grade banded magnetite gabbro horizons overlying the main high grade unit.

Metallurgical tests

Australian Vanadium has performed six benchscale metallurgical tests on oxidised composite samples to date, with magnetic and gravity separation processes demonstrating potential to upgrade the vanadium content.

Small-scale, medium-intensity, magnetic variability tests have also been undertaken on the samples, mostly from the upper profile within 40m from surface.

Test results indicate variation along strike in the degree and depth of oxidation and a “general trend of increasing magnetic yield and improving concentrate quality” with depth from surface.

“Further variability testing is planned to support a definitive feasibility study designed to better understand, characterise and predict the metallurgical performance of material within the weathered horizon,” Mr Algar said.

“We believe there is significant opportunity to improve mining and milling economics once this comprehensive testing program is completed.”

Project infrastructure

The pre-feasibility base case scenario proposed infrastructure to support the remote mine and processing operations, with capital and operating costs based on infrastructure typical of nearby mines.

A standalone natural gas power station will be built under a build-own-operate contract, while water for the operations will be sourced from suitable bores located within Australian Vanadium’s mineral tenements.

Ease of access to the mine site will be via a purpose-built access road, with costs and final routes yet to be determined.

A permanent accommodation village will support the operations team, with the majority of workers transported direct from Meekatharra airport.

Allowances have also been included for administration and storage buildings, mine and plant workshops, communications, emergency power, security, waste and refuse management.

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