A new set of field samples by Thor Mining (LSE:THR) at its US vanadium projects has revealed highly encouraging results, boding well for the next phase of its expansion.

Thor discovered potentially rich vanadium and uranium samples at its Colorado mineral claims.

Executive chairman Mick Billing said the company are “very pleased with the calibre of the vanadium samples collected, and in particular the uranium content.”

Over half of the samples had radioactivity levels too high to be tested on site, and are now on their way to specialist laboratories to examine just how uranium-rich they are.

The eagerly awaited assay results are expected by the end of July 2020.

The uranium market surged 40% to four-year highs in April 2020 after Covid-19 disruption hammered global supplies. And prices are holding steady at elevated levels north of $33/lb.

That puts smaller uranium producers in an extremely strong position to capitalise.

Uranium ore, once mined and milled, is packaged as powder and shipped to refineries worldwide to prepare it for use as fuel in nuclear reactors.

Eight initial tests on site also revealed a significant 1% vanadium pentoxide, while two outcrop samples were even higher at 1.8% and 2%. Vanadium pentoxide is the rare metal’s most important compound, the principal precursor to its alloys and is widely-used as an industrial catalyst, in gas processing and as a commercial colourant.

Rare earth metals are vital for producing components for everyday technologies from smartphones and computers to medical equipment.

Demand growth

Chinese markets have shown the largest and most significant vanadium demand growth in the last six months, with markets willing to pay up to 9% more for both vanadium pentoxide and ferrovandium compared to previous half-year. 

Most vanadium is used in Chinese steel mills, especially in high-strength, low-alloy steel tomke construction rebar.

New standards introduced by the Chinese government in November 2018 set stricter strength criteria for this rebar and was expected to trigger a vast increase in vanadium demand. As industry analysts Roskill note in their market report to 2029, supply and demand developments “will continue to reshape the vanadium market over the next decade”. While vanadium demand growth in 2019 remained strong, the market looks to have returned to balance in 2020 so far.

But as post-Covid construction in China ramps up, vanadium demand is expected to grow strongly across the rest of the year.

Coming next

Rare earth metals like vanadium appear in such extreme low concentrations worldwide that their mining is highly specialised.

News of such high concentrations represent a big win for Thor, which on 1 June 2020 announced it had acquired an exclusive option to acquire 100% of the private Australian miner American Vanadium Pty Ltd (AVU), the company that holds significant vanadium and uranium interests across Colorado and Utah.

AVU has a 100% stake in Colorado’s Standard Minerals Inc and Utah miner Cisco Minerals. Together the two companies hold nearly 300 claims in the Uravan Mineral Belt in Colorado, and the historic uranium mining area of Thompson Yellow Cat in Utah, which in particular is a likely focus of future work for Thor.

Thor noted that a processing plant which has been used to take ore from the region within close proximity may represent a potential low cost entry into production.

Over the last 100 years Uravan’s uranium-vanadium districts have produced 85 million lbs of U308 (uranium ore) at 0.25%, with 660 million lbs of vanadium at 1.29%.

Author: Mark Sheridan

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