Vanadium

  • Regency Mines announces entry into vanadium sector as demand growth continues (RGM)

    Regency Mines (LSE:RGM) sat at 0.33p this morning after announcing its decision to enter the vanadium sector yesterday afternoon.

    In an update that helped shares to jump 14.3pc on Thursday, the company said it has secured a 45-day option to buy a 50pc stake in a North American vanadium exploration project. It has paid for the option through the issue of 5m Regency shares at a price of 0.5p each, which comes to a total of £25,000. This price represents a 42.9pc premium to the mid-market share price when the deal was agreed.

    Vanadium is a vital additive in the steel alloy and chemical industries and is enjoying a growing demand thanks to rapid infrastructure development in emerging economies and new technologies using so-called ‘super alloys’. Indeed, according to Regency, prices of vanadium pentoxide, one of the most important compound of vanadium from an industrial perspective, have risen by around 700pc over the last three years.

    As it stands, around 70pc of primary vanadium supply is a secondary product derived from reprocessing slag generated in steel mills. The remaining 30pc is extracted from several different types of mineral deposits and is primarily produced as a co-product or by-product of other commodities.

    Alongside its vanadium option, Regency- which was trading down 18.8pc as at the time of writing – said it has decided to exit its niobium-tantalum project in Greenland. It advised the country’s authorities of its decision to surrender licence 2014/01 at the end of 2018 after concluding that its Motzfeldt project there was non-core. The firm put the shift in its approach to the project – which it acquired in 2014 – down to changing market conditions and company priorities.

    Andrew Bell, chairman of Regency Mines, said: ‘As we exit Greenland having concluded that the niobium-tantalum project there was non-core, we are pleased to have secured this option for Regency Mines, which, if exercised, gives the company exposure to a vanadium exploration opportunity in North America that lies squarely within our battery metals focus and complements our nickel-cobalt asset at Mambare.

    A successful project in vanadium could provide Regency with three main pillars of value within the Company.  The vanadium project would provide a high potential impact exploration opportunity.  At our 50% owned Mambare project we have a significant JORC compliant nickel/cobalt deposit. And we have a revenue-generating coal production asset through our 47% interest in Mining Equity Trust LLC. Regency Mines is entering into an exciting phase. We look forward to providing further updates in respect of the vanadium project and across all our business operations.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Revenues soar but disappointing vanadium output sees Bushveld Minerals fall (BMN)

    Bushveld Minerals (LSE:BMN) dipped 5.3pc to 38.6p on Wednesday morning after revealing that its vanadium production fell short of expectations last year.

    The firm, which has rocketed from 8.6p over the past year, produced 2.560mtV of the metal from its South Africa-based Vametco project. The metal was produced in the form of Nitrovan, Bushveld’s trademark product sold in major steel markets across the world. This figure falls short of the 2,649mtV produced by the company in 2017 as well as its previously-announced guidance range of 2,600 to 2,650.

    Bushveld said production was hit by unplanned maintenance and a repairs programme at Vametco in the final quarter of the year. The lower volumes that resulted from this work also led production costs to come in 3pc higher than guidance at ZAR260.6/KgV.

    Wednesday’s disappointment comes after Bushveld was forced to reduce its 2018 production guidance from a range of 2,850mtV to 3,000mtV in Q3 2018. This came after production was hit by a two-week-long period of local, unprotected industrial action and a seven day kiln shutdown due to unplanned maintenance. The resolution of these issues led the business to enjoy a 22.4pc jump in production between the third and fourth quarters of 2018. 

    Despite the disappointing production figures, Bushveld investors can take some solace in the fact that the firm’s sales revenue soared 142.7pc to $192.2m in 2018. Likewise, its EBITDA rose by 349.2pc to $107.5m. These increases were underpinned by higher ferrovanadium prices, which increased by 148.9pc year-on-year to an average of $81.2/KgV in 2018. Since the beginning of 2019, however, prices of the metal have dropped to an average of $76/KgV.

    To address its ongoing performance issues, Bushveld launched a detailed diagnostic review of the Vametco plant in October. This was followed by the launch of an ‘operational transformational programme’ in December that aims to enhance the site’s performance. In Wednesday’s update, the business said it expects these efforts to result in higher production over the next 12 months. Guidance for 2019 will be provided in Bushveld’s Q1 operational update, once all aspects of the transformational programme have been scheduled.

    On the exploration side, Bushveld said it has completed 13 drill holes at Vametco. These are part of an initiative to increase geological confidence and grade control of the ore mined at the project. The results have provided evidence of additional resources and reserves and an updated mineral resource estimate is due in the current quarter.

    Finally, the firm has now received all of the assay results for the first phase of an exploration programme at its neighbouring Brits project. These have either been above or in line with management’s expectations. The results of a second phase of drill holes are expected in the current quarter and will be followed by a maiden mineral resource estimate in Q2 2019.

    Fortune Mojapelo, chief executive at Bushveld, said that while Bushveld is benefitting from high vanadium price, it recognises the importance of driving Vametco towards ‘operational excellence’ and its ‘true potential’.

    ‘The transformation programme we have initiated at Vametco is designed to do just that and we are confident to see an improved production performance during 2019,’added Fortune. ‘The deposit hosts exciting potential and our drilling programmes at Vametco and Brits have been carefully designed to ensure that we extract the wealth of the minerals in our portfolio and extract them in the most cost efficient, sustainable way.

    ‘At the Brits deposit, the recent exploration results continue to prove the deposit as a future source of additional production tonnages. As it is an election year for South Africa, we expect continued stability and positive sentiment to allow us to focus on our operations and make long term investment decisions for the benefit of all our stakeholders, including employees, local communities and shareholders.’

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Strong vanadium, uranium results boost Thor Mining (THR)

    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

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Where next for Thor Mining’s Molyhil and Bonya projects as CEO Mick Billing heads out on site visit?

    Thor Mining chief executive Mick Billing is currently out in the Northern Territory of Australia visiting the company’s Bonya tenements adjacent to its flagship Molyhil tungsten and molybdenum project. The visit follows recent claims by the business that it is continuing to make steady progress in its efforts to lock in project finance and off-take agreements for metal concentrates mined at the asset. With this in mind, can investors expect an imminent update on the project? Here we look at Molyhil and Bonya’s in detail before running through Thor’s recent efforts to enhance both assets’ already attractive fundamentals.

    Making Molyhil

    Wholly-owned by Thor, Molyhil is a tungsten and molybdenum asset located around 320km east of Alice Springs. The project is formed from two adjacent magnetite skarn bodies that contain economic amounts of scheelite, molybdenite and magnetite mineralisation.

    Before Thor’s involvement, little work had taken place at Molyhil bar a brief period of mining at its southern ore body during the late 1970s and early 1980s. Thor has built upon these efforts considerably, completing resource extension drilling and metallurgical test work. It has also made a great deal of permitting progress, carrying out technical, environmental and social studies as well as securing environmental approvals and land agreements with traditional owners.

    Thanks to Thor’s work, Molyhil is now one of the higher-grade open-pit tungsten in the western world. A mineral resource estimate in 2014 gave it a complete resource of 4.71Mt for 13,100ts of tungsten trioxide and 6,220ts of molybdenum.

    To build on this potential, the firm completed a feasibility study in August last year. The work gave Molyhil a post-tax NPV of $101m, an IRR of 59pc, and a seven-year open pit mine life delivering annual production of 120,000mtu tungsten trioxide and 450t of molybdenum – both in concentrate. Meanwhile, opex came in at just $90/mtu.

    Thor also believes that Molyhil could deliver a great deal of upside, through both operational enhancements and the opportunity to pursue satellite resources and underground production. Indeed, the firm has demonstrated that high molybdenum and tungsten trioxide continue below the pit floor.

    The underground case for Molyhil(Source: Company)

    Advancing talks

    Thor has spent much of this year focused on locking in project finance and off-take agreements for both tungsten and molybdenum concentrates mined at Molyhil. Although this has taken longer than expected, Billing recently said Thor’s confidence in securing such a deal ‘remains firm’. He added that the company had been approached by, and advanced discussions with, several players whose interests include offtake agreements, joint venture arrangement, or debt instruments.

    In the meantime, Thor has also spent time working to support these discussions by enhancing Molyhil’s already attractive fundamentals. In June, the organisation drilled two holes down plunge of the site’s Yacht Club lode to support the production of tungsten and molybdenum concentrate samples for prospective offtake partners. One of these holes intersected 1pc tungsten trioxide and 0.16pc molybdenum down 92.6m.

    The hole confirmed extensive high-grade scheelite mineralisation and molybdenum grades expected at Molyhil. However, it also encountered 0.13pc copper from the surface, a grade that Billing described as ‘potentially economic’. Although copper has been part of Molyhil mineral resource estimates before, it has been absent from Thor’s recent marketing efforts. However, with recent work supporting the production of a separate, saleable copper concentrate at Molyhil, this could soon change. Thor believes that the modest copper levels could provide another revenue stream and plans to include the metal in an updated Molyhil mineral resource estimate over coming months.

    Bonya boost

    Thor’s efforts to enhance Molyhil’s fundamentals have also seen it complete considerable work at a collection of adjacent tenements called Bonya this year. Bonya, in which Thor purchased a 40pc position from Arafura Resources last year, hosts 13 outcropping tungsten deposits. These currently carry an exploration target of 3-4.9MMts at 0.3-05pc tungsten trioxide. The area also hosts an inferred copper resources of 230,000ts for 4,600ts of copper. Thor plans to extract and process this at Molyhil for a ‘minimal additional cost’. Despite the licence area being part of a known tungsten province, no tungsten drilling has taken place since the 1970s. Regardless, in April, Billing said he hoped that Bonya could add ‘considerably’ to Molyhil’s life, scale, and economic outcomes.

    Location of the Bonya tenements relative to Molyhil(Source: Company)

    True to its word, Thor - alongside Arafura - completed an initial 2,500m reverse circulation drilling programme across Bonya earlier this year. The work confirmed strong tungsten and copper mineralisation across several deposits, with particularly strong results coming from two areas called White Violet and Samarkand.

    Highlights from White Violet included 27m at 0.29pc tungsten trioxide from 35m, 12m at 0.67pc tungsten trioxide from 46m and 29m at 0.7pc tungsten trioxide from 81m, including 13m at 1.13pc tungsten trioxide. Meanwhile, top copper intersections at Samarkand included 5m at 0.36pc copper, 12m at 0.77pc copper, and 7m at 1.23pc copper. To read the results in more detail, please click here. To build on these strong initial results, Thor and Arafura will now target near-term drilling to test the extent of the two deposits and create reportable mineral resource estimates.

    Vanadium opportunity

    Finally, it is worth mentioning that Thor’s deal with Arafura last year also saw it take a 40pc stake in the Jervois vanadium project in Australia at no extra cost. Although the project is very early-stage, past exploration has intersected extensive and potentially economic grades of vanadium and titanium. Some samples also returned up to 1.59ppm of combined gold, platinum, and palladium when assayed.

    Thor and Arafura announced an exploration target range for Jervois of 90-110MMts at 0.3-0.8pc vanadium pentoxide and 4-8pc titanium dioxide in July. The pair also outlined a future work programme for the asset, which will focus on resource drilling at the Casper, Coco, and RD deposits. They will also test another prospect for potentially economic grades of vanadium and titanium and complete follow up work on the gold and PGE potential on all candidates. Subject to success in these areas, the business would then conduct further metallurgical studies along with environmental and social impact studies.

    Where next?

    As can be seen, Molyhil has long represented an attractive asset. Work completed by Thor over the past year has only enhanced this prospectivity by adding in a whole new source of tungsten deposits and throwing copper into the mix. With the company long claiming that Molyhil has enjoyed third party interest, there seems a good change that these efforts will have made the project more attractive to potential offtakers and financiers. In the wake of Billing’s trip to Bonya, then, can Thor firm finally take discussions over the line and create value for itself and shareholders alike?

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.