THE DRILL SERGEANT: Horizon Minerals (ASX: HRZ) reported on completion of a Pre-Feasibility Study of the company’s Joint Ventured Richmond-Julia Creek vanadium project located in Central North Queensland.
The Pre-Feasibility Study focussed on the higher-grade Lilyvale deposit following an infill drilling program in late 2019, which resulted in an updated JORC 2012 Mineral Resource estimate of 560 million tonnes grading 0.48 per cent vanadium for 2.6 million tonnes vanadium at a 0.3 per cent lower cut-off.
Horizon Minerals reported the updated Pre-Feasibility Study, based on an initial 25-year life (25% of Ore Reserve), demonstrated Richmond-Julia Creek to be a financially strong project with the following key metrics:
Shallow low impact open pit mining producing 101.5Mt of oxide ore at a fully diluted grade of 0.49 per cent vanadium for 19.75Mt of 1.82 per cent vanadium with concentrate production on site;
Refining overall recovery at 86.1 per cent produces 317,500 tonnes of 98 per cent vanadium commercial grade flake with average annual production of 12,700 tonnes vanadium;
Modest up-front capital costs of $242.2 million (US$176.8m) and operating cash costs of $8.66 per pound (US$6.32/lb) of 98 per cent vanadium flake;
At current spot price of $13.15/lb (US$9.60/lb) vanadium the project generates NPV10% of $613 million (US$447.5M) with IRR of 38 per cent and a payback of 3.2 years.
“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,” Horizon Minerals managing director Jon Price said in the company’s ASX announcement.
“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.
“What sets this project apart is its minimal impact on the environment with shallow open pit mining, progressive rehabilitation, low capex, conventional processing and first quartile operating costs.
“We look forward to the completion of the DFS in 2022 and believe the project can have significant economic development benefits to regional Queensland and the national economy.”
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