Australian Vanadium Limited (ASX: AVL) has announced the inking of a Joint Venture agreement with Ultra Power Systems Limited (UPS) to advance the Coates Vanadium Project near Perth.
The company said that the JV was signed with UPS to evaluate AVL’s Coates Vanadium Project. UPS aims to produce vanadium electrolyte using a combination of a unique processing route and high-density vanadium electrolyte production.
AVL announced that the JV was signed to create value for shareholders by monetising a secondary asset and testing processing technology focused on enhancing the uptake of vanadium redox flow batteries in Australia. AVL said that the agreement allows for it to receive either $500,000 or equivalent shares in UPS.
Coates Vanadium Project
The Coates Vanadium deposit is situated approximately 35km east of the Perth metropolitan area in the Shire of Wundowie. The deposit contains minimum indicated reserves of 39 Mt to a cut-off grade of 0.4 % and an average grade of 0.51% V205 according to McKay.
The unique geology of the Coates deposit shows that vanadiferous magnetite is developed from the weathering profile of an underlying gabbro in a laterite outcrop on a ridge. The Coates Gabbro is about 1 km long and up to 600 m wide.
Exploration at Coates was undertaken in the 1970s after its discovery in the early 1960s. Previous metallurgical test results indicate that a 58% recovery of vanadium at an approximate grade of 1.4% V2O5, 3% TiO2, 67% Fe grade with 8% SiO2 is achievable from an ore assaying 0.54% V2O5, 4.75% TiO2, 25% Fe and 29% SiO2.
AVL announced that a Joint Venture Agreement has been signed with vertically integrated electrochemical processing and energy storage technology company Ultra Power Systems Ltd.
UPS aims to provide brand and generation agnostic solutions with the core provision of a third-generation VRFB, which represents a transformational catalyst to enable the vision of blended power supply inputs on micro- and mega-grids. UPS has one of the three licences to Pacific Northwest National Laboratory’s (PNNL) generation 3 vanadium electrolyte production globally.
It may be noted that UPS holds the exclusive Australian option to license the VanadiumCorp Electrochem Processing Technology (VEPT). VEPT enables the recovery of valuable by-products during the vanadium processing route with minimal carbon production and minimal waste.
Terms of Agreement
AVL said that the agreement allows UPS the exclusive right to earn a 49% legal and beneficial interest in the tenement. This is subject to a $5,000 signing fee, followed by $50,000 being spent on exploration on the tenement within the first 12 months of the agreement and $150,000 being spent during the first 24 months.
AVL said that when the obligations outlined above have been fulfilled, the agreement allows for UPS to acquire AVL’s Joint Venture interest for a sum of $500,000 or shares in UPS, at the election of AVL.
AVL said that UPS will test material from the Coates Vanadium Project as feed material. If proved successful, UPS plans to test the low-grade mineralisation from AVL’s Australian Vanadium Project using the VEPT process. UPS aims to produce vanadium electrolyte and manufacture VRFBs in Western Australia.
AVL noted that the mutual goals of the two companies are complementary from a business perspective.
Statements from Companies
AVL’s Managing Director Vincent Algar said: “Having a deposit so close to Perth will enable the testing of both the VEPT process and production of generation 3 electrolyte at a relatively low cost. AVL looks forward to developing the relationship with UPS further as we advance the vanadium industry in Western Australia.”
UPS’s Managing Director Brad Appleyard announced: “We are excited to commercialise VEPT exclusively in the mining friendly and vanadium-rich jurisdiction of Australia. With strong channel partners, investors and government support we intend to establish the leading integrated solution for vanadium batteries worldwide.
Stationary battery storage is the key to a successful transformation of the energy industry into one based on renewable energy. Vanadium Redox Flow Batteries are the cleanest and most effective such technology available today.
The central role played by the electrolyte in these batteries provides UPS with an opportunity to play a key role in the power industry well into the future”.
Adriaan Bakker, President and CEO of VanadiumCorp said “This is an exciting time to establish an integrated and sustainable supply chain for vanadium battery production in Australia.
Western Australia is home to the most significant vanadium-titanium-iron resources on earth as well as strong government support for recovering key battery materials sustainably.”