Global Vanadium hints at two new vanadium investments as it shifts from oil and gas focus

Global Vanadium ASX GLV investments oil and gas Philippines iron sands magnetite
Global Vanadium is in active negotiations for two new projects as part of its continued vanadium focus.

Newly renamed and refocused Global Vanadium (ASX: GLV) has announced two potential project opportunities and provided an update on its investment in the Philippines iron sands vanadium-magnetite project.

The Western Australia-based company officially changed its name and ASX ticker code from Baraka Energy and Resources and BKP in December 2018 in order to “better reflect the company’s stated strategy of pursuing its investment in the vanadium commodity sector”.

As part of this strategy, the company completed a review of a shortlist of projects for potential investment and today announced it is actively pursuing negotiations on two opportunities.

The review comprised both early-stage and advanced projects and involved Global director Jason Brewer and the company’s geological and metallurgical consultants conducting several due diligence site visits and meetings in South Africa.

According to Global, the two potential projects have so far met all of the company’s ongoing technical and due diligence requirements.

However, it did not reveal further information as while negotiations are considered to be “at a high level”, they are still incomplete.

Philippines project

Global also today updated the market on its investment in the Philippines iron sands vanadium-magnetite project, which is currently held through loan advances to unlisted public company Consolidated Iron Sands (CIS) and its 97%-owned subsidiary Luzon Iron Development Group Corporation.

Luzon holds exploration permits covering two offshore areas between Sanchez Mira and Gonzaga in the Cagayan province of Luzon, the largest island in the Philippines.

From September to November 2018, Global conducted a review of the project and provided Luzon with its requested monthly budget advances under the existing secured loan agreement.

By the end of the 2018 calendar year, the total funds advanced were in excess of $4.06 million, which Global said was “over and above the amount envisaged to be loaned”.

Meanwhile, a review of information has prompted Global to decline the advancement of the December budget, particularly given it was “unclear if and when the current renewal of the exploration permits will be granted by the Philippines authorities”.

In addition, Global claims that none of the loan funds in the December budget were being used to protect ad preserve the permits or meet the expenditure required under Philippines law.

Global has requested a revised budget from CIS and Luzon and said it intends to continue to work in good faith with the companies to advance the project.

Oil and gas asset

Global had previously focused on oil and gas under its old identity and despite its strategic shift to vanadium, it has chosen to hold onto an exploration permit in the Northern Territory’s Southern Georgina Basin.

The company had encountered elevated hydrocarbon shows during the drilling of its McIntyre-2 well in 2011, but activities were suspended when a fracking ban was imposed across the entire territory.

However, the moratorium was lifted in April last year and since then, the company has reported “significant interest” in the project.

As part of its asset review, Global concluded that the project “is in good standing and represents an under-explored asset with potential to add significant value to the company”.

Global said it has engaged an unrelated corporate firm for a four-month period to pursue a potential joint venture or other divestment opportunity for the project.