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Critical Minerals study reveals $510m NPV for vanadium play


Critical Minerals Group drilling at its Lindfield project. Credit: File

Critical Minerals Group has outlined a viable mine life of more than 15 years and a net present value of $510 million for its Lindfield vanadium project in Queensland in details from a scoping study released today.


The study focuses on the development of a 4-million-tonne per annum mine producing vanadium pentoxide with a molybdenum trioxide by-product, but does not include the potential upside of producing high-purity alumina (HPA).


The resource estimate for Lindfield includes 254 million tonnes at 0.44 per cent vanadium pentoxide and 4.75 per cent aluminium oxide in the indicated category. The latest study, which was conducted by Wave Engineering, also shows a post-tax internal rate of return of 17 per cent.


Management says the deposit is amenable to shallow open-pit mining techniques, with a higher-grade 138 million tonnes at 0.46 per cent vanadium pentoxide sitting in the surface-to-10m zone. A further 133 million tonnes lies in the next 10m-to-20m section.


The direct capital costs were estimated at about $400 million to enable production of about 10,500 tonnes of vanadium pentoxide and 550 tonnes of molybdenum. The company says the study highlighted opportunities that could be investigated with further engineering to reduce the overall capital cost.


With an IRR and positive NPV of approximately 17% and $510 million respectively from the vanadium pentoxide and molybdenum trioxide products streams, this is a terrific result and one that underpins the next phase of study and test-work. Critical Minerals Group managing director Scott Winter

The company says metallurgical testing of the vanadium shows an economically viable beneficiation process that warrants pilot plant testing. The results indicate successful concentrate upgrades of 1.5 per cent and 1.7 per cent for the respective upper and mid seams and were used in the refinement of the mine plan and schedule.


Just this week, the company revealed it will investigate the HPA production potential of its Lindfield project after signing a new agreement with mineral processing technology company Lava Blue. The deal will allow the two companies to further refine the project’s processing technology and develop the HPA production stream at the Lindfield vanadium project, 30km from the town of Julia Creek.


Management says recent beneficiation testwork has shown it can produce 4N-grade HPA, meaning 99.99 per cent purity, using Lava Blue’s technology. It also believes there is potential for further upgrading with minor optimisation.


In 2021, the Queensland Government committed $10 million from the “Invested in Queensland” program towards a vanadium common user facility in Townsville for an industrial pilot and demonstration facility for mineral processing. Earlier this year, the government allocated another $75 million for the facility to support further extraction of HPA, cobalt and rare earths, in addition to vanadium production.


With a long mine life and a compelling NPV already at hand, it will be interesting now to see if Critical can add more value at Lindfield by proving up its HPA potential.


Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au


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