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PFS confirms robust economics at Bushveld’s vanadium project

4th February 2016

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – A prefeasibility study (PFS) on Bushveld Minerals’ 64%-owned Mokopane vanadium project, in Limpopo, has determined an ore reserve of 28.56-million tons, supporting a minimum 30-year life from less than 10% of the total project resource of 298-million tons.

The company noted that this represented significant exploration upside and confirmed the project as a strategic asset of major significance to the future global vanadium market.

The PFS further established that the selected salt roast processing method lowered project risks, while contemplating a one-million-ton-a-year run-of-mine operation, producing 9 525 t/y of vanadium pentoxide (V2O5) flakes at 99.5 weighted percent purity.

"We are pleased to present such a positive PFS for the project. The results support our long-held goal to develop this project into a highly profitable, significant contributor to South African and global vanadium market output,” Bushveld Minerals CEO Fortune Mojapelo said.

Meanwhile, using a conservative long-term exchange rate of R12.75 to the dollar and a real vanadium price of $7.50/lb, the PFS indicated robust project economics, with a payback period of four years, a pretax net present value of $418-million and an internal rate of return of 24.8%.

Mojapelo added that, with a first-quartile cash cost proposition, the project provided the sort of asset Bushveld required to pursue its integrated vanadium development strategy.

“We have taken a conservative approach in determining the PFS parameters and, in my view, as the global economic environment improves, the economics of the project will only get better,” he said.

Further, he noted that, while the company was mindful of the recent low commodity price environment, including V2O5 prices below $3.50/lb, an analysis of the fundamentals of the market, backed by independent research, suggested that a significant proportion of the current global vanadium production was unsustainable at these levels.

“Significant reductions in vanadium supply during the past 6 to 12 months, coupled with a robust demand outlook, present a compelling argument for sustainable vanadium price recovery in the medium to long term.

“We continue to engage with potential partners on ways to take this project forward towards a definitive feasibility study. We also continue to explore, assisted by insights developed by this PFS, potential brownfield opportunities that could serve to further reduce the capital expenditure requirements from what are already very modest levels, thereby providing an option to bring forward the date of production commencement and cash flow generation,” Mojapelo elaborated.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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