A preliminary economic assessment of Prophecy Development Corp.'s Gibellini vanadium project in Nevada defined a posttax net present value of US$338.3 million, using a 7% discount rate, with a 50.8% internal rate of return and a 1.72-year payback period.
The proposed open pit, heap leach operation is estimated to have a posttax cumulative cash flow of US$601.5 million, assuming an average vanadium pentoxide, or V2O5, price of US$12.73/lb.
Annual production is expected to average 9.7 million pounds of V2O5 over a 13.5-year life of mine, with all-in sustaining costs pegged at US$6.28/lb of V2O5, according to a May 29 release.
Initial capital costs are estimated at US$116.8 million, including 25% contingency.
Prophecy Development said a 20% increase in the price would boost the project's economics to a net present value of US$491.3 million with a 63% internal rate of return and cash flow of US$864.4 million.
The analysis included an updated resource estimate. The Gibellini deposit hosts measured and indicated resources totaling 23 million tonnes grading 0.286% V2O5 for 131.3 million pounds of contained V2O5, with inferred resources of 15 million tonnes grading 0.175% V2O5 for 52.3 million pounds of contained V2O5.
The Louie Hill deposit hosts inferred resources of 7.5 million tonnes grading 0.276% V2O5 for 41.5 million pounds of contained V2O5.
The resource estimate uses various cutoff grades of 0.101% V2O5 for oxide material, 0.086% V2O5 for transitional material and 0.116% V2O5 for reduced material.
The company is preparing to tender contracts for engineering, procurement, construction and management and expects to complete the task in 2019. In addition, discussions are underway regarding potential investments and other financings as well as off-take deals.
Prophecy Development secured the right to acquire Gibellini in late April after amending a June 2017 mineral lease agreement.
