“Getting to the PEA level for Carlin was a significant milestone for
us and is a key part of the process for unlocking the value of the
project,” Paul Cowley, the company’s president and CEO, said in an
interview.
The early-stage study estimates an open-pit mine life of 11 years producing a total of 180 million lb. vanadium oxide (V2O5).
The study also envisions processing an additional five years of
stockpile feed that would generate an annual average of 11 million lb. V2O5
after the mine reaches the end of its operating life. Sulphuric acid
and electricity from the processing plant would then be sold for a
four-year period.
“The deposit is located in significant mining hub, so as we approach
the end of the life of the vanadium mine, the processing plant could
continue to provide acid as well as electricity to mines operating in
the district, so we won’t need to find buyers for it.”
The PEA estimates average operating costs for the large-scale open-pit project of US$4.81 per lb. V2O5 for the first 10 years and US$5.17 per lb. V2O5 over the life of the mine.
“The most significant component of the PEA is the low operating
costs, which fall into the lower quartile for vanadium production and
therefore provides us with a significant advantage over other vanadium
producers, whose costs are generally much higher,” Cowley said.
The PEA forecast pre-production capital requirements for the project of US$535 million, and calculated an after-tax net present value of US$29 million at a discount rate of 6%, an internal rate of return of 7% and a payback period of 7.7 years. The study used a V2O5 price of US$10.65 per pound.
The project has indicated resources of 24.64 million tonnes grading 0.615% V2O5 for 303 million lb. contained V2O5 , and inferred resources of 7.19 million tonnes grading 0.520% V2O5 for 75 million lb. V2O5 . The estimate uses a cut-off grade of 0.3% V2O5 .
Cowley noted that Carlin could become a source of much-needed vanadium for the United States. The bulk of the vanadium in the U.S. is sourced from China. As a consequence, the U.S. Department of the Interior has deemed vanadium as one of the commodities considered critical to the country’s economic and national security.
“The PEA demonstrates Carlin’s importance as a critical resource for a vital strategic metal that is essential to protecting U.S. national interests,” he said, “particularly as it is only one of two primary vanadium deposits located in North America.”
Vanadium is used in a range of applications, including in vanadium-steel alloys for use in amour plates, car gears and crankshafts. Titanium-aluminium-vanadium alloys are also used in jet engines and aircraft, and vanadium is also an ingredient in lithium-ion batteries used in electric vehicles.
The company also believes that the Carlin deposit may host significant gold mineralization.
“We’ve been so focussed on the PEA that the gold opportunity has been sitting idle,” said Cowley, “but now we want to bring forward that opportunity by tapping into the plumbing system of the Carlin Gold Trend, where the deposit is located.”
The company has employed the renowned Carlin Gold Trend specialist and former Newmont (TSX: NGT; NYSE: NEM) exploration manager, Dave Mathewson, who has interpreted a high-grade gold deposit at depth that sits below the vanadium mineralization.
To evaluate the mostly underexplored gold targets within the project, the company plans to conduct drilling at gold targets this summer, Cowley said.
At press time in Toronto, First Vanadium was trading at 20¢ per share within a 52-week trading range of 12¢ and 51¢.
The company has 42 million common shares outstanding for an $8.7-million market capitalization.