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Technology Metals study outlines A$870M value for Gabanintha vanadium project

Technology Metals Australia Ltd.'s definitive feasibility study for its Gabanintha vanadium project in Western Australia outlined a posttax net present value, discounted at 8%, of A$870 million, a 27.3% internal rate of return and a 3.2-year payback period.

A pre-feasibility study for the project in June 2018 pegged a posttax net present value, discounted at 10%, of A$850 million, a 43% internal rate of return and a 3.4-year payback.

Total pre-production process plant capital expenditure is now estimated at A$454 million, with average operating costs of US$4.04 per pound of vanadium oxide, according to an Aug. 21 release.

Average annual vanadium oxide production is expected to be 27.9 million pounds over a 16-year mine life, with production to start in 2022.

Life-of-mine revenue is estimated at A$7.02 billion, while life-of-mine EBITDA is pegged at A$4.06 billion. The project hosts a total resource of 131.0 million tonnes at 0.9% vanadium oxide at a 0.4% lower cutoff grade.

The company recently executed a nonbinding memorandum of understanding with China-based CNMC Ningxia Orient Group Co. Ltd. for vanadium off-take from Gabanintha. Technology Metals plans to further progress off-take and finance discussions and advance environmental approvals and a mining lease grant.

An investment decision for the project is expected at the beginning of the second quarter of 2020.