Increasing global demand and a robust vanadium price have spurred local exploration junior Hardey Resources (ASX: HDY) to acquire and re-open the historic Nelly vanadium mine in Argentina’s San Luis Province.
Under the terms of a binding Heads of Agreement, Hardey will acquire the shares of Nelly Vanadium Pty Ltd, the current owner of the Nelly mine, and lodge an application to re-open the mine with a view to fast-tracking the recommencement of production.
During Nelly’s eight years of operation, only part of the known deposit was exploited, leaving most of the untapped mineralisation intact.
Hardey will utilise modern geophysical survey techniques and exploration drilling to extend the known 40m depth of mineralisation at Nelly in the dip direction of historic mineralised veins.
Re-opening and expanding a historic mine
Situated over a 53-hectare tenement approximately 170 kilometres from the capital of San Luis Province in one of Argentina’s leading vanadium districts, the Nelly mine opened in 1949 primarily as an open pit, and later as an underground operation.
It was one of the few mines in Argentina at the time with an onsite processing plant however the concentration processes, which were partly experimental advanced technology for the time, prevented the operation reaching a critical scale.
The Nelly deposit comprises several vanadium-rich polymetallic sheeted vein systems, aligned northeast to southwest, up to 1 kilometre long and 5.5 metres wide.
Historical sampling and assay results produced grades from the mined section of the vein ranging up to 1.9% vanadium pentoxide, with a length weighted sample average of 0.82% vanadium pentoxide.
High demand for vanadium
Hardey Resources’ decision to re-open the Nelly mine comes at a time when global supply bottlenecks and increased demand, coupled with the rising profile of the renewable battery sector, have pushed up the price of vanadium.
While China used to supply 50% of the world’s vanadium, the country is now using much of its domestic production to address new building requirements for increasing the strength of concrete structures in earthquake zones.
China has also closed some of its polluting mines, reducing its output by 10% and forcing the creation of new vanadium supply chains including Australia and Argentina.