Technology Metals Australia (ASX:TMT) has closed the books on its synergistic merger with Australian Vanadium (ASX:AVL), forging what could be Australia’s first operating primary vanadium producer.
Today (1 February 2024), the tie up completed, with AVL acquiring all shares in fellow vanadium player Technology Metals Australia.
Australian Vanadium says it firmly believes the merger will unlock material benefits through the consolidation of adjoining projects on one contiguous orebody, to create one of the largest and most advanced vanadium development projects globally.
“Today AVL, a critical and battery metal company based in Western Australia, accelerates its journey to become a global leader in the vanadium supply chain. We are all now shareholders in one stronger company and we look forward to delivering the combined benefits to all our shareholders.
Since the announcement of the transaction in September, AVL has been working diligently with the TMT team to integrate the two projects and to assess project enhancement opportunities and development strategies which can now be unlocked by the successful completion of the merger.”
Australian Vanadium had retained financial advisor Macquarie Capital and legal advisor Corrs Chambers Westgarth for the transaction.
Technology Metals Australia worked with Sternship Advisers and Argonaut PCF, while DLA Piper was retained as legal advisor.
The United States Geological Survey (USGS) states world economic resources of vanadium are about 19 million tonnes but total world resources exceed 63Mt.
China currently dominates world vanadium resources with 42%, followed by Russia at 23% and Australia at 18%.
However, Australia does not currently produce the soft, ductile, silver-grey metal, which is primarily used with iron to make metal alloys for high-strength steel production.
On 25 September 2023, both Australian Vanadium and Technology Metals Australia agreed to a $217 million merger via a proposed scheme of arrangement, as reported by Mining.com.au.
As announced today, the scheme has been implemented, creating a primary Australian vanadium developer through the consolidation of 2 adjoining projects across one orebody.
Now combined, the group hosts a ‘world-class’ asset of scale in a tier-one mining jurisdiction, being the Australian Vanadium Project in Western Australia.
As such, Australian Vanadium reports work is underway focusing on concentrate quality and coproduct optimisation to unlock reduced capital and operating costs and realise higher revenue and maximising project economics.
The Australian Vanadium project is one of the most advanced vanadium projects currently being developed in the world, being awarded the Federal Major Project Status by the Australian government in September 2019 and State Lead Agency Status by the Western Australian government in April 2020.
According to Australian Vanadium, Wood Group has begun work on an Optimised Feasibility Study, the first phase being the finalisation of trade off studies and informing of the preferred project development pathway for the integrated project.
Phase one is scheduled for completion within the June quarter of 2024.
Meanwhile, the company remains committed to other immediate priorities beyond the integration work, including finalising a combined mineral resource statement, funding and offtake for the combined project, and completing regulatory, environmental and permitting requirements.
The company will also continue to assess downstream opportunities, including pursuing growth initiatives in the vanadium flow battery market through its wholly owned subsidiary, VSUN Energy, as well as operating its recently constructed vanadium electrolyte manufacturing facility in Western Australia.
As part of the merger with Technology Metals Australia, the company has welcomed Jo Gaines to the board as Non-Executive Director effective from today.
Gaines was previously the Deputy Chief of Staff to the Premier of Western Australia.
As of 31 January 2024, Australian Vanadium had $29.6 million cash at hand, with further progress payments to be received under its $49 million Modern Manufacturing Initiative grant for its namesake project.
Vanadium has many applications and is used in various industries, including steel production, electric vehicle (EV) batteries, chemical catalysts, aerospace, as well as medical. The majority of vanadium is used in the Chinese steel industry, particularly manufacturing high-strength, low-alloy steels.
However, as the clean energy transition accelerates globally, vanadium is playing a greater role in batteries, which in turn is attracting more investor interest. Vanadium demand in 2024 is poised to continue to be driven by steel production capacity. Prices could rise when a number of existing and new vanadium installations move to the battery market.
On AVL’s website the CEO is quoted as saying: “There are currently three primary vanadium producers in the world. AVL intends to be the fourth, just as vanadium use in batteries has moved from 1% of the market two years ago, t over 10% of the market today.
We are already seeing signs of the vanadium market disconnecting from the traditional steel-dominated supply-demand dynamic and evolving to a ‘new normal’ structural change driven by rapidly growing battery and critical metals demand.”
With over 80% of the global vanadium supply coming from Russia, China, and South Africa, we also see a strong desire from our future customers for jurisdictional supply chain diversification. Positioned in the heart of battery metals country in Western Australia, the Australian Vanadium Project is strategically positioned to provide an ethically sourced and scalable supply of vanadium to global steel, battery, and critical metals markets.
AVL’s Project is the most advanced primary vanadium development project globally, with a world-class feasibility study and extensive pilot plant testwork which ratifies our position to produce some of the world’s highest purity vanadium at a first quartile operating cost. With a project that is economic even in a traditional steel dominated market, a 25-year mine life, robust economics, scalable production optionality, and the best vanadium minds in the world on our team, we are truly excited about what the future holds for AVL, our shareholders, and our stakeholders.”
Australian Vanadium is a resource company focused on vanadium and seeks to offer its investors a unique exposure to all aspects of the vanadium value chain — from resource through to steel and energy storage opportunities.
The company’s assets also include the Coates vanadium-platinum group elements-nickel-copper Project about 60km east of Perth, and the Nowthanna Hill Uranium and Vanadium Project about 50km south of Meekatharra.
TMT’s Murchison Technology Metals Project (MTMP), located in Western Australia, comprises the Gabanintha and Yarrabubba Vanadium Projects. Combined, the two vanadium projects contain 153.7Mt at 0.8% V2O5.
Technology Metals has completed the Definitive Feasibility Study for Gabanintha in late 2019 and the Yarrabubba Integration Study was completed in mid-2022. The study has integrated the ‘high-grade’ Yarrabubba deposit into the MTMP mine plan, extending the mine life out to 25 years and generating a dual revenue stream of vanadium pentoxide and ilmenite.
Write to Adam Drought at Mining.com.au
Images: Technology Metals Australia & Australian Vanadium
