Price jump spurs Horizon JV to take plunge on vanadium study

ASX-listed Horizon Minerals and its joint venture partner have taken the next major step towards developing their Richmond-Julia Creek vanadium project in central north Queensland after fine-tuning last year’s pre-feasibility study on the proposed long-life project development. Perth-based Horizon and JV partner Richmond Vanadium Technology have now committed to a definitive feasibility study that is slated for completion next year.

On the back of improved spot vanadium prices, the JV’s updated pre-feasibility study, or “PFS”, shows Richmond-Julia Creek’s cornerstone Lilyvale deposit underpinning an initial life of mine of 25 years based on forecast annual production of 12,700 tonnes of 98 per cent grade vanadium pentoxide flake.

Lilyvale’s latest published open-pittable ore reserves stand at 459.2 million tonnes grading an average 0.49 per cent vanadium pentoxide for 2.25 million tonnes of contained vanadium pentoxide.

The initial 25-year mining and processing operation involves the extraction of about 101.5 million tonnes of oxide ore at a fully diluted grade of 0.49 per cent vanadium pentoxide for the on-site production of 19.75 million tonnes of vanadium pentoxide concentrate going 1.82 per cent.

The JV plans to ship the concentrate from Queensland to China for refining where it envisages an overall recovery rate of just over 86 per cent to produce a total of 317,500 tonnes of 98 per cent vanadium pentoxide commercial-grade flake, or an average 12,700 tonnes per annum.

Key financial estimates in the revised PFS for the Richmond-Julia Creek project, which lies about 550km west of Townsville, include a pre-production CAPEX of $242.2 million and operating cash costs averaging $8.66 per pound of 98 per cent vanadium pentoxide flake.

The concentrator processing plant on site and the refinery in China speak for $190 million of the total capital cost numbers.

Horizon says the current spot vanadium pentoxide flake price sits at about A$13.15 per pound or US$9.60 per pound, up more than 35 per cent on the spot price of US$7.10 per pound when the PFS mark I was released almost 10 months ago.

Based on the PFS mark II’s economic metrics, Richmond-Julia Creek’s net present value tips the scales at $613 million and its internal rate of return comes in at 38 per cent.

Horizon Minerals Managing Director Jon Price said: “The Richmond-Julia Creek project is one of the largest undeveloped oxide vanadium resources in the world and can produce globally significant supply for both the steel and emerging energy storage markets. Restricted supply and increased demand have resulted in a sustained increase in prices with the initial 25-year mine life at Lilyvale generating an NPV of $613 million at current spot prices.”

In parallel with the definitive feasibility study, the JV intends progressing discussions with potential offtake partners.

According to Horizon, vanadium has become a strategic metal in most parts of the world and is listed as a critical commodity by the Federal Government agency, Geoscience Australia and in the Government’s Australian Critical Minerals Prospectus 2020.

Interestingly, the Richmond-Julia Creek project has been included in the prospectus.

Horizon says Richmond Vanadium Technology has now met its $6 million earn-in commitments and has moved to 75 per cent ownership of the project.

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