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The company has signed a one-year extension to an option agreement for land to locate its processing plant near Geraldton and reaffirmed the benefits of the coastal location strategy.
Australian Vanadium Ltd (ASX:AVL) has signed a one-year extension with the landowner of the proposed location for its vanadium processing plant near Geraldton in Western Australia.
To ensure a low-cost operation, AVL plans to undertake crushing, milling and beneficiation of vanadium bearing magnetite ore at the mine site location and transport the resulting concentrate to the proposed processing plant outside Geraldton, where final refinement to high-quality, high-value vanadium products will take place.
“Extension the logical step”
AVL managing director Vincent Algar said: “During our 2019 feasibility work we identified a potentially valuable opportunity in locating our vanadium processing plant near Geraldton.
“This resulted in us searching for and securing a suitable location for our plant west of Mullewa, near Geraldton.
“Over the past year, we have confirmed that this processing plant location is ideal for the company.
“The extension of our option over the relevant land, for a modest option fee, is a logical step as we move forward with our feasibility work and towards production.”
Prime location
The physical and infrastructure benefits of the processing plant’s location include:
*Access to cheaper and more competitive natural gas and the associated capital cost reduction of not needing to build a gas pipeline to the mine site;
*The opportunity for power at the mine site to have a large component of renewable energy, including a vanadium redox flow battery;
*Reduced mine site water requirements by approximately one-third of total water used;
*A reduced mine site camp, due to reduced numbers of personnel required onsite and workers at the Geraldton location living locally, preferably at their homes; and
*Reduced construction costs for the processing plant and cheaper transportation costs of reagents.
By-product benefits
A unique value proposition resulting from this arrangement is that the company can consider the sale of a titanium concentrate by-product which will be generated after extraction of high purity vanadium products.
The potential for sale of iron-titanium by-products is one of the globally unique opportunities provided by the coastal location of the plant.
Extension terms
This extension agreement provides a one-year extension of the original option agreement signed on October 21, 2019, and the option payment for the second term is 1% of the purchase price, with half payable in cash and half in AVL shares.
The number of shares issued will be based on the volume weighted average share price over the previous five trading days prior to the payment of the option fee.
Land size is calculated at 1,334 acres, with the purchase price of $2,100 per acre.
Source: Proactive
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