Horizon Minerals Limited (ASX: HRZ) has announced that it plans to begin work on a Definitive Feasibility Study for the Richmond-Julia Creek vanadium project in North West QLD, after the recent completion of a Pre-Feasibility Study by project joint venture partner Richmond Vanadium Technology.
The DFS, expected for delivery in 2022, will include offtake arrangements along with statutory and environmental approvals required for the commencement of project works.
“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”
Richmond Vanadium Technology earn-in
The PFS was carried out by Richmond Vanadium Technology (RVT), in a deal that has seen the JV partner earn a 75% interest in the project. The $6M earn-in was comprised of two stages, earning RVT 25% and 50% for a $1M and $5M spend respectively, inclusive of the delivery of a feasibility study. Horizon retains a 25% interest in the project.
The PFS focused primarily on the higher-grade Lilyvale deposit, and followed an 333-hole infill drill program carried out in 2019. The result of the program was an upgraded JORC-2012-compliant MRE of 0.56Bt grading 0.48% V2O5, for a total of 2.6Mt V2O5.
The PFS delivered the following key information:
- PFS Based on an initial 25-year life (25% of ore reserve)
- Shallow low impact open pit mining producing 101.5Mt of oxide ore at a fully diluted grade of 0.49% V2O5 for 19.75Mt of 1.82% V2O5 with concentrate production on site
- Refining overall recovery at 86.1% produces 317,500 tonnes of 98% V2O5 commercial grade flake with average annual production of 12,700t V2O5
- Modest up-front capital costs of A$242.2m (US$176.8m) and operating cash costs of A$8.66/lb (US$6.32/lb) of 98% V2O5 flake
- At current spot price of A$13.15/lb (US$9.60/lb) V2O5, project generates NPV10% of A$613.0M (US$447.5M) with IRR of 38% and a payback of 3.2 years
Horizon Minerals Managing Director Jon Price said: “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. 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 A$613M 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.”