First Vanadium Corp. [FVAN-TSXV; FVAN-OTCQX] has released positive results on its preliminary economic assessment (PEA) for the 100%-optioned Carlin vanadium project located six miles south from the town of Carlin, Nevada. The NI 43-101 compliant PEA has been prepared by independent consultant Wood Canada Limited (Wood).
The PEA is based on the Mineral Resource Estimate outlined in the company’s Technical Report dated April 9, 2019. The PEA demonstrates positive economics for a large-scale open pit mining operation, with 16 years of vanadium production and four additional years of acid/power sales.
Paul Cowley, President and CEO, said, “The PEA crystalizes potential economics for the company’s vanadium asset and provides for design options and enhancement opportunities. Unit Operating costs averaging US$4.81/lb V2O5 in the first 10 years and US$5.17/lb V2O5 over Life-of-Mine are of significant note, and in the range of lower quartile operating costs of vanadium producers. We can see numerous opportunities to lower both Capex and Opex to benefit the vanadium asset which we will act upon to advance the project.
“With a positive PEA, the Carlin Vanadium Project becomes an even more important resource of a critical and strategic metal essential to protecting US national interests, particularly as the US looks towards vital future domestic sources of strategic metals which includes vanadium.”
Cowley added, “In addition, the benefit of having both vanadium and a separate gold opportunity on the same property located within the world-famous Carlin Gold Trend is unique, broadens our opportunities and is another of our many strengths. With our goal to maximize on all our high-quality opportunities to enhance value for our shareholders, it is now time to bring our exceptional gold opportunity to the forefront with the aim to drill-test this summer. This drill program will be led by Ex-Newmont Regional Manager and proven mine-finder, Dave Mathewson who has found six gold deposits within three to nine miles of the property.”
PEA Highlights: (US$ unless otherwise noted): Life-of-mine (LOM) of 11 years of mining plus 5 years of stockpile feed, with 1.0 million tons annually of process plant feed at an average grade of 0.71% V2O5 and average process recovery rates of 78%, resulting in an annual average payable production of 11 million pounds of V2O5 flake. Project includes a 4-year extension post-mineral processing of stockpiles, selling sulfuric acid and energy exclusively from acid plant.
Total payable production: 180 million pounds of V2O5 flake. LOM average cash operating cost per payable V2O5 pound: US$5.17/lb V2O5; US$4.81/lb V2O5 over the first 10 years.
Pre-Production capital requirements: US$535 million. Undiscounted cash flow Pre-tax: US$356 million, Undiscounted cash flow After-tax: US$301 million. Pre-tax NPV (6%): US$56 million, After-tax NPV (6%): US$29 million. Pre-tax IRR: 7.9%, After-tax IRR: 7.0%Pre-tax Payback period: 7.5 years; After-tax Payback period: 7.7 years. Assumed metal price of US$10.65/lb V2O5. Potential for up to 230 jobs at the peak of production.
The Carlin Vanadium Project is a near surface primary vanadium resource hosted in black shale; the largest highest-grade resource of its kind in North America.
The mine design is based on two objectives; firstly, to mine the highest grade in the oxides, followed by non-oxides, and secondly, once the whole deposit is mined, tailings produced by feeding the stockpiles would be stored in the pit.
The company believes that there are numerous opportunities to enhance the Carlin Vanadium Project further through:
- Expanding and defining, by drilling, additional oxide mineralization to the northwest end of the deposit, and additional non-oxide mineralization to the east and west of the deposit, all to the Indicated category thereby extending the processing period of high-grade resources beyond year 12 and deferring the processing of lower grade stockpiles;
- More detailed process test work, engineering and project definition may reduce capital costs or contingencies;
- Further testing of higher efficiency centrifuge separation that could reduce mass pull in pre-concentration stage and thereby reduce operating costs and improve recoveries;
- Further testing of alternative technologies in solid-liquid separation to potentially reduce the size of the tailing facility, and IX and SX plants and thereby potentially reducing capital costs; and;
- The PEA will make recommendations to enhance and advance the vanadium project, as a phased work approach to completing a Pre-Feasibility study, which would update the project study to a higher level of precision.