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LONDON (Alliance News) - Bushveld Minerals Ltd Monday said its scoping study for the development of its Bushveld vanadium project in South Africa has shown strong economics with a pretax net present value of USD561.9 million.
The mineral development company with several operations in southern Africa said the scoping study sees a base case production scenario of 1 million tonnes per year run-of-mine producing 10,370 tonnes of vanadium flakes with a low capital expenditure of USD261.5 million.
The company said the base case also shows a pretax internal rate of return of 35.6% and low operating costs of USD5.99 per kilogram of vanadium.
Bushveld said it expects to receive payback from the mine 4 years and 4 months after the start of mining and sees a 30-year life of mine on over 60% operating margins.
The scoping study was led by independent consultants and selected a salt roast processing route as best for development of the site, with strong cost curve fundamentals, a proven path to near-term production, low capital expenditure and scalability.
The Bushveld vanadium project has a large, JORC-compliant 52 million tonne vanadium mineral resource on the Main Magnetite Layer, consistent along a 5.5 kilometre strike length.
The site has shown world class vanadium grades in tests, Bushveld said, with an average of around 2.0% vanadium in concentrate for a total contained resource of roughly 760,000 tonnes of vanadium.
"The scoping study announced today is a significant milestone that brings us one step closer towards unlocking the value of this world-class vanadium resource. We are pleased that it has been completed just eight months after the Bushveld vanadium project was established as a standalone platform," Chief Executive Fortune Mojapelo said in a statement.
Bushveld Minerals shares were up 20% to 4.35 pence during early trading on Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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