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PrintA Preliminary Environmental Assessment report has also been completed with the JV partners reviewing costs and timing for the advancement of a definitive feasibility study.
Horizon Minerals Ltd (ASX:HRZ) JV partner Richmond Vanadium Technology Pty Ltd (RVT) has completed a positive pre-feasibility study (PFS) for the Richmond-Julia Creek Vanadium Project in northwest Queensland.
The PFS was based on an initial mine life of 20 years and has demonstrated a financially viable project.
This work also resulted in the estimation of a maiden open pit ore reserve at Lilyvale deposit of 459 million tonnes at 0.49% vanadium pentoxide (V2O5) for 2.25 million tonnes of contained V2O5 product within a resource of 560 million tonnes at 0.48% for 2.6 million tonnes V2O5.
"Quality and viability"
Managing director Jon Price said: “Our joint venture partner RVT has done an excellent job demonstrating the quality and viability of this world-class oxide vanadium resource.
“The Lilyvale deposit alone can provide globally significant supply for the next 100 years and easily expand production to meet the increasing demand from both the steel and emerging battery storage markets.”
“With this increase in demand in coming years and the reduction in the supply of vanadium from steel slags, we see the vanadium price continuing its steady climb and look forward to advancing the project to DFS level and commencing commercial production discussions with interested offtake partners.”
Key metrics
The PFS includes the following key metrics:
Shallow open pit mining producing 81.2 million tonnes at a fully diluted grade of 0.49% V2O5 for 15.8 million tonnes of 1.82% vanadium concentrate with concentrate production on-site;
Refining overall recovery at 86.1% produces 254,000 tonnes of 98% vanadium commercial-grade flake with average annual production of 12,700 tonnes vanadium;
Modest up-front capital costs of US$157.4 million and operating cash costs of US$5.53/lb of 98% vanadium flake; and
At current spot price of US$7.10/lb vanadium, project generates NPV8% of US$150 million.
JV with RVT
In March 2017, the company entered a strategic development joint venture with RVT covering Horizon’s 100% interest in the Richmond Vanadium Project comprising 1,550 square kilometres of Cretaceous Toolebuc Formation.
RVT completed the initial earn-in period by spending A$1 million to earn 25% in March 2018 and has commenced the second stage expenditure commitment of A$5 million over three years inclusive of a feasibility study to earn a further 50% interest.
There are no baseline surveys undertaken at this stage for the project whilst waiting for the outcomes of this PFS.
The environmental approvals are considered a critical path for development of the project with engagement of a suitable environmental consultant considered a key element to undertake the requisite surveys, stakeholder engagement and approvals process.
A Preliminary Environmental Assessment (PEA) Report has been compiled for the project which entails investigations in relation to environmental issues such as flora, fauna, heritage, surface and groundwater, and soils.
Capital expenditure
Capital expenditure totals US$157.4 million consisting of the concentrator plant including the TSF, power station, camp, access road to site, water supply and other associated infrastructure to establish and commission the site.
Offsite capital includes a refining plant built offshore in China.
Funding
As of the end of September 2020, Horizon had A$17.3 million cash at bank, debt of A$4 million and investments totalling A$4.1 million in ASX-listed companies.
A further A$1.625 million in cash and A$1.625 million in shares is anticipated to be generated within six months in relation to the divestment of the Menzies Gold Project to Kingwest Resources in 2019.
Horizon’s board is confident the company will be able to finance its share of the next steps of the Richmond-Julia Creek Vanadium project.
Next steps
Immediate next steps include finalising the optionality within the PFS to the next level of study where required in areas such as determining the optimal power supply along with progressing environmental studies and preparing the documents for government permitting and approvals.
Discussions will continue with potential offtake partners in conjunction with assessing the way forward in relation to the project, including financing or assessing other options for maximising shareholder benefit from the project.
Source: Proactive Investors 2020
Source: Proactive Investors 2020
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