Gabanintha Pre-Feasibility study
Technology Metals presented the findings of it’s Pre-Feasibility Study (PFS) in June 2018.
Key findings of the PFS shows the Gabanintha project is both technically and economically feasible with an initial Ore Reserve of 16.7Mt @ 0.96% V2O5 and targeted annual production rate of 13,000t per annum V2O5. The payback of capital is estimated to be less than 2.5 years from the start of production including six months of ramp up.
The PFS outlines one of the largest pure play vanadium operations in the world.
Highlights of the PFS are presented below.
|Pre-feasibility Study Highlights1|
|Targeted Annual Production Rate||13,000 tpa V2O5|
|Estimated Processing Life (LOM)||13 years|
|LOM Revenue||A$4,935 million|
|LOM EBITDA||A$3,070 million|
|Pre-tax NPV (10% discount rate)||A$1,277 million|
|Pre-tax Internal Rate of return||55%|
|Post-tax NPV (10% discount rate)||A$850 million|
|Post-tax Internal Rate of return||43%|
|Average Operating Cost||US$4.27/lb V2O5|
|Capital Expenditure||A$380m (US$284m)|
|Payback of Capital||<2.5 years|
1 - estimated to confidence level -15% to +25%
Maiden Ore Reserve
An initial Ore Reserve of 16.7Mt @ 0.96% V2O5 is to be mined using conventional truck and excavator methods.
The PFS schedule is largely based on the Indicated Mineral Resource of 21.6 Mt @ 0.9% V2O5 which delivers a schedule of 19.2 Mt @ 0.9% V2O5 after considering cut-off grades, mine dilution, and mining recovery (and includes 13% Inferred Mineral Resource).
Metallurgical work and Processing
Initial RC sample work undertaken in Q3 2017 established that the vanadium does concentrate through LIMS that the base of oxidation is variable and, that some near surface material (<30 m depth) displays minimal oxidation. LIMS work undertaken on the initial RC composites showed that the fresh zone recovered >90% of the vanadium present into approximately 73% of the mass. Once the ability to use magnetic separation to concentrate the vanadium was confirmed additional work was undertaken utilizing diamond core sample.
A total of six half meter sections of HQ diamond core were provided for comminution and physical testwork. These sections had their In-situ density measured and were tested for their Uniaxial Compressive Strength (UCS). Samples were selected for Bond Impact Crushing Work Index (CWi) testing based on mineralogical origin. Samples were selected from the CWi products as well as products from the UCS for SAG Mill Comminution (SMC) testing. Once composites were made up for metallurgical testwork the Bond Ball Mill Work Index (BBWi) was tested.
Once the composites were made up the grind sensitivity of the material was tested with respect to vanadium recovery and grade of magnetic concentrate. Composites 1 and 2 (Massive Fresh and Massive Transitional respectively) are the critical results for the PFS, as the Basal Massive Magnetite unit is being considered as the primary feed for the study with a LOM average of 85% Fresh (Composite 1) and 15% Transition (Composite 2).
Mineralogical analysis of the products produced through LIMS at P80 106 μm indicates that recovery of the Fe-Ti oxides containing vanadium is exceptional through the LIMS with 99.7% recovered to the magnetic fraction. The mineralogical analysis also indicates that both the concentrate grade is unlikely to be able to be increased significantly and that gangue rejection likely can’t be improved. There would be an opportunity to recover Ni-Co-Cu sulfides present that report to the non-magnetic fraction in the LIMS, flotation will likely yield high recoveries of these sulfides however, the economics of this are unknown at this stage.
The majority of the salt roast and water leaching work was done on an 85/15 blend of magnetic concentrates from Composite 1/Composite 2. At optimal sodium carbonate dosage, the gangue constituents of the massive zone being silica, alumina and chromium, do not appear to be significantly reactive.
Desilication and Ammonium Metavanadate (AMV) precipitation testing was undertaken simultaneously with roast and leach optimization due to the pressing timeline. The most significant results from this testing were from test HY6265; desilication removed 82.9% of the aluminium, 68.7% of the silicon with vanadium losses of 5%. With further testing this can be refined, and vanadium losses lowered even further.
When this desilicated solution was taken to AMV precipitation it yielded a precipitation efficiency of 99.15% for vanadium, but also precipitated 67.8% of the aluminium and 89% of magnesium in solution. This isn’t a large issue as aluminium and magnesium have low solution tenors; 20 mg/L for both in this desilicated leach liquor. The AMV produced is of a 99.4% purity based on the sum of impurities on an oxide basis. Impurities were considered to be at the Limit of Detection (LOD) if they were below the LOD. This AMV was taken and calcined to V2O5.
The calcined V2O5 assays at 99.02% on a sum of impurities basis, with further work and process refinement this will be able to be improved. This definitively shows the viability of the traditional salt roast process to produce high purity AMV or V2O5 from Technology Metals Gabanintha deposit.
The plant basis of design was developed using the metallurgical testwork results and standard industry assumptions for retention times and stockpile capacities made by competent engineers to align with the plant operating philosophy. Process engineers involved with this area of design have experience in vanadium processing operations. The flow sheet below shows a conventional crushing, milling, salt roast, water leach processing circuit producing a high purity V2O5 flake.
A summary of the capital cost estimate is presented below and totals $A 380M (US$ 285M) this includes a contingency of A$ 60M (US$ 45M). Exchange rates relevant at the time of study was 1 AUD = 0.75 USD.
|Capital Cost||Total Cost (AUD Million)|
|Total Expected Cost||380|
The operating costs were generated utilising information provided in the mass balance, direct process engineering input for heat loading and reagent usage, mining operating costs and the equipment maintenance aligned with the CAPEX equipment.
The Operating Cost Estimate base case for the Project can be summarised by the key aspects below:
|Operating Costs||Total Cost (AUD Million)||Total %|
|Labour - Admin and Management||2.7||2|
|Labour - Processing||14.8||12|
|Flights, Messing and Accommodation||5.9||5|
|Utilities - Water||0.17||0|
|Packaging and Handling||0.85||1|
|TOTAL Average Operating Costs||$124.5M||100|
The project operating cost based on product value was calculated at US$4.27lb.
Note that this cost is inclusive of mining, processing, package handling and transport to a nominal port in China.
Opportunities to reduce the operating costs include;
- Mining costs make up 31% of the current OPEX estimate. Further geotechnical drilling and assessment to steepen the footwall has the potential to significantly reduce the amount of waste mined over the LOM.
- The PFS pit optimisations reached a depth of the currently identified Indicated Mineral Resource, indicating that given additional drilling, further extensions of the Indicated resource at depth and along strike could be economically recoverable by open pit mining.
The Gabanintha Project delivers an attractive financial return with strong revenue delivering a short 2.5 year pay back and IRR of 43% post tax. The forecasted life of mine revenue is based on lower sales prices (weighted average US$ 13.0/lb) than the traded values recorded in April 2018 (Metals Bulletin- in-warehouse Rotterdam) prices of US$ 14.50/lb. Forecast sales prices are sourced from Merchant Research & Consulting Ltd, a UK based market research company specialising in the chemical sector and related industries and take in to account the anticipated market development and the healthy demand scenarios.
Based on a 10% discount rate the Project delivers a post-tax NPV of A$ 850M (US$ 638M) and IRR of 43%. The life of mine operating costs using an AUD : USD exchange rate of $ 0.75 is US$ 4.27/lb. The project has a payback of less than 2.5 years from first production including a 6 month ramp up period.
|Financial Metrics||Total Cost (AUD Million)||Total Cost (AUD Million)|
|Revenue per Pound (USD)||USD/lb V2O5||13.0|
|NPV 10% Post Tax||$AUD m||848.8|
|IRR Post Tax||%||43.2%|
The model’s key sensitivity is the price for V2O5. A 20% reduction in the model price to US$10.40 /lb revealed a post -tax NPV of A$500M. A +/-20% sensitivity analysis on the V2O5 price is summarised in the table below.
|Impact of Change in Price||-20.00%||-10.00%||Base Case||10.00%||20.00%|
|NPV 10% Post Tax||499||674||849||1,024||1,200|
|IRR Post Tax||31%||37%||43%||49%||54%|
Technology Metals Australia is now progressing with a Definitive Feasibility Study (DFS). By building relationships with potential end users and further de-risking the project the company aims to be in production by the end of 2021.