[Ferro-Alloys.com] Australian Vanadium Limited Quarterly Activities Report

HIGHLIGHTS

Merger with Technology Metals Australia Limited

Scheme of arrangement approved under which Australian Vanadium Limited (ASX: AVL, the Company or AVL) will acquire 100% of the shares on issue of Technology Metals Australia Limited (ASX: TMT).

Combination of AVL and TMT creates a leading Australian vanadium developer through the consolidation of two adjoining projects across one orebody, realising synergies through a single integrated project.

Scheme of arrangement is expected to be implemented on 1 February 2024.

Australian Vanadium Project

The Company continues to progress activities to develop the Australian Vanadium Project including:

Miscellaneous licence granted for haulage road and water pipeline.

Extension of MOU with Neometals for collaboration on purchase of a vanadium and iron concentrate and co-location of shared infrastructure.

Permitting activities at processing plant location progressed.

Vanadium in energy storage

Construction of AVL’s first vanadium electrolyte manufacturing facility has been completed in Western Australia without injury.

The facility is capable of producing annual quantities of high purity electrolyte equivalent to 33MWh of battery energy storage capacity.

AVL vanadium electrolyte production will deliver local Australian manufactured product into a growing demand market and allows for qualification of AVL material with battery manufacturers.

Facility opened by the Hon. Madeleine King MP in January 2024.

Vanadium flow battery (VFB) purchased by Horizon Power arrived in Australia, with factory acceptance testing to be undertaken by AVL’s wholly owned subsidiary, VSUN Energy Pty Ltd (VSUN Energy), in conjunction with Horizon Power.

VSUN Energy has progressed its first prototype VFB targeting residential applications

 Corporate

No lost time injuries or reportable environmental incidents were recorded during the quarter.

Cash position of $24.6 million as at 31 December 2023, including restricted cash of $0.4 million.

Management Comment

CEO, Graham Arvidson comments, “During the quarter, AVL continued its momentum across a range of activities, including the merger with Technology Metals Australia, advancement of the Australian Vanadium Project, construction of our vanadium electrolyte facility and our VSUN Energy vanadium flow battery initiatives.

The consolidation of the Australian Vanadium Project’s contiguous orebody provides a unique opportunity for a project of increased global significance and unencumbered development potential. We anticipate completion of the merger on 1 February 2024 and look forward to welcoming our new shareholders.

The completion of the construction of AVL’s first vanadium electrolyte manufacturing facility was a major milestone for the Company and we were pleased to successfully and safely execute another segment of our ‘pit to battery’ strategy. The facility’s construction demonstrates AVL’s technical and project management abilities which will underpin the development of the larger Australian Vanadium Project. We were grateful to the Hon. Madeleine King MP for opening the facility with us and to all the other attendees at the event for their support.”

Activities for the quarter ended 31 December 2023 for the Company are as follows:

MERGER WITH TECHNOLOGY METALS AUSTRALIA

On 25 September 2023, AVL and TMT announced a proposed merger under which AVL will acquire 100% of the shares in TMT via a scheme of arrangement (Scheme).1 Following the end of the quarter, the Scheme was approved by TMT shareholders on 16 January 2024,2 was approved by the Supreme Court of Western Australia on 19 January 20243 and became effective on 22 January 2024.4 The Scheme is due to be implemented on 1 February 2024.3

The merger will provide the Company with several key benefits including:

the logical combination of two adjacent projects across one orebody, providing a unique opportunity to realise operational and corporate synergies through a single integrated project, with the potential to unlock significant optimisation benefits;

creating a leading Australian vanadium developer with a world-class asset of scale, located in Western Australia, a Tier-1 mining jurisdiction;

the combined group will have a strengthened financial position and is expected to see significant improvement in its ability to raise equity finance, secure project financing and provide access to government, export credit agencies and private sector financing

to support project development ambitions;

increased offtake partner and strategic investor appeal, improved capital market profile, greater scale, improved liquidity and a stronger balance sheet to position the combined group well for the next phase of development activities; and

opportunity to leverage compelling market fundamentals and improved investor sentiment.

During the quarter, the working group established post the initial merger announcement on 25 September 20231 continued to assess the optimal development and processing pathway for the combined asset, with the intention to deliver greater shareholder return.

THE AUSTRALIAN VANADIUM PROJECT

During the quarter the Company continued to progress activities aimed at developing the Australian Vanadium Project (Project) which is located approximately 43km south of Meekatharra in Western Australia.

AVL’s application for Miscellaneous Licence ML51/116 was granted by the Government of Western Australia’s Department of Energy, Mines, Industry Regulation and Safety on 22 December 2023. The licence has been granted for the purpose of building a road from the Great Northern Highway to the Project, along with a water pipeline for water supply from the neighbouring Westgold Resources Limited (ASX: WGX) Reedy’s pit.

AVL finalised the competitive Early Contractor Involvement (ECI) phase scope with Primero Group Ltd and GR Engineering Services Ltd for the engineering, procurement and construction (EPC) of the Gabanintha crushing, milling and beneficiation (CMB) plant and associated infrastructure.

During the quarter, AVL pursued ongoing optimisation testwork on its grate kiln design, focusing on simplification and improved heat rate, while maintaining or improving leach extraction and improving energy efficiency, thereby reducing gas consumption.

A sample of AVL’s vanadium concentrate arrived at Metso’s York laboratory in Q4 2023 and is undergoing further testing which is focused on further improving processing plant performance.

Permitting activities for the Company’s proposed processing plant site at Tenindewa, near Geraldton were progressed, including:

A scheme amendment provided to the City of Greater Geraldton in December is currently under review, with expected advertisement in February 2024.

Development approval submitted to the State Development Assessment Unit (SDAU) in December is being progressed for advertising.

During the quarter, management visited several potential customers and steel mills in China to further advance offtake opportunities for AVL’s FeTi coproduct. The visit was effective in advancing offtake discussions with target customers toward binding offtake.

In January 2023,5 AVL signed a term sheet with Neometals Limited (ASX: NMT and AIM: NMT) to investigate opportunities for:

AVL to purchase and further process the co-product vanadium and iron concentrate generated from Neometals’ Barrambie Project; and

AVL and Neometals to co-locate and/or share infrastructure near AVL’s processing plant site.

On 19 October 2023, AVL and NMT agreed to extend the term for the investigation to 23 October 2024.

AVL continues to be active in the communities of Meekatharra, Mullewa and Geraldton. During the quarter AVL sponsored, attended and supported the Pollinators NextGen Entrepreneurs Competition in Geraldton. AVL is proud to support NextGen as they help communities build knowledge and understanding of science, technology, engineering and mathematics (STEM). The Company also sponsored the Midwest Charity Begins at Home gala. Over the past 15 years the charity has raised over $2.6 million to support families facing medical challenges. They offer support to people from across the Mid West region, including Meekatharra.

Source：Australian Vanadium Limited 

• [Editor:tianyawei]