Technology Metals Australia has formed an agreement with China’s CNMC Ningxia Orient Group Company (CNMNC) over vanadium production from the Gabanintha vanadium project in Western Australia.
CNMNC is a top ten producer of vanadium alloys in China, producing both vanadium nitrogen alloys and ferrovanadium for the Chinese domestic steel industry.
The agreement includes a minimum annual sales quantity of 2000 tonnes on a take-or-pay basis, over the six years term of the agreement.
The annual sales quantities from the agreement equate to about 16 per cent of the Gabanintha vanadium project’s forecast annual average production.
Technology Metals is expecting to generate annual revenue of approximately $50 million from the sales, or $300 million over the full six year term.
Technology Metals director Ian Prentice said the sales agreement marked a “key milestone” for progressing the development of Gabanintha vanadium.
“This agreement is a key milestone for progressing the development of Gabanintha vanadium project, including the engineering, procurement and construction (EPC) and financing discussions and underscores the importance of delivering a very high quality DFS (definitive feasibility study) and a very high purity vanadium pentoxide product,” he said.
Technology Metals was incorporated in 2016 for the sole purpose of identifying exploration projects with aim of discovering commercially significant mineral deposits.
Gabanintha vanadium project is estimated contain 131 million tonnes of 0.9 per cent vanadium pentoxide, including a high grade zone of 71 million tonnes with grading of 1.1 per cent vanadium pentoxide within a single massive magnetite layer.
A full range of metallurgical test work has shown that the orebody can be processed using conventional salt roast techniques to produce high grade vanadium pentoxide product with over 99 per cent purity.
Technology Metals is also in discussions with CNMNC’s sister company, China Nonferrous Metal Industry to carry out the engineering, procurement and construction arrangements.