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Date : 25/09/2023

The Untapped Potential of ASX Vanadium Stocks

Certain minerals have become synonymous with progress in the rapidly evolving world of energy storage and advanced alloys. Lithium and graphite may be the poster children for the next-gen battery revolution, but vanadium is lurking in the shadows, ready to stake its claim.

Vanadium: More Than What Meets the Eye

At first glance, vanadium may captivate a different level of attention from investors than some of its counterparts. However, dismissing it would be a grave oversight. The strength and durability of vanadium to steel alloys make it indispensable in constructing vehicles, aircraft, bridges, and other infrastructure projects. Its resilience against extreme temperatures and corrosion makes it a wonder metal for such applications.

But that’s just one side of the vanadium coin. The mineral’s use in energy storage batteries positions it at the forefront of the renewable energy revolution. As the world leans more heavily into wind and solar power, vanadium’s role in this transition becomes more crucial.

ASX and the Vanadium Proposition

Several challenges exist in vanadium mining that present opportunities for companies listed on the Australian Stock Exchange (ASX). The heavy concentration of vanadium ore in nations like China and Russia compels many enterprises to seek diversification. Add to this the complexity of mining vanadium, given its unique properties, and it becomes clear that companies specializing in its extraction are primed for growth.

Let’s delve into some standout ASX vanadium stocks that are carving out a niche in this lucrative space.

Australian Vanadium Ltd (ASX: AVL)

Australian Vanadium Ltd (ASX: AVL) is a vanadium-focused company with mining and exploration projects within Australia.

 Key Project – The Australian Vanadium Project:

This project stands out in the West Australian Goldfields due to its significant reserves and resources.

  1. Resource and Reserve Data:The project boasts a total resource of 239 million tonnes at a grade of 0.73% vanadium. Additionally, it has an ore reserve of 30.9 million tonnes at a grade of 1.09%.
  2. Economic Feasibility:According to its pre-tax NPV (Net Present Value), the project is valued at $833 million, suggesting it has the potential to be highly profitable. The IRR (Internal Rate of Return) at 20.6% indicates a favourable return on investment.
  3. Production Potential:Once operational, the mine can produce 11,200 tonnes of vanadium pentoxide annually. This production rate is set for an impressive mine life of over 25 years.
  4. Beyond Mining:AVL’s ambitions extend beyond mere extraction. Through its subsidiary, VSUN Energy, the company is working on a residential version of the Vanadium Redox Flow Battery (VRFB). This venture indicates AVL’s commitment to supply the vanadium market and drive innovation within the renewable energy storage sector.

ASX Vanadium Stocks analysis

 Technology Metals Australia (ASX: TMT)

Technology Metals Australia (ASX: TMT) is a significant player in the vanadium market, boasting valuable assets and a strong commitment to downstream production capabilities.

Key Project – The Murchison Technology Metals Project (MTMP):

Located in Western Australia, the MTMP has garnered attention due to its vast resources and strategic importance.

  1. Resource Data:MTMP has a measured resource of 153.7 million tonnes at a 0.8% grade of vanadium pentoxide.
  2. Production Projections:The project will produce 13,000 tonnes of vanadium pentoxide annually. This production rate positions TMT to provide 6% of the global vanadium supply.
  3. Downstream Capabilities:A distinctive feature of TMT’s approach is its focus on downstream production. By doing so, the company aims to enhance Australia’s position in the vanadium market, particularly given that Australia holds the world’s second-largest vanadium reserves.

Richmond Vanadium Technology (ASX: RVT)

Richmond Vanadium Technology (ASX: RVT) is a relatively newer entrant in the ASX vanadium scene. Originating from its spin-off from Horizon Minerals, RVT has showcased strong potential.

 Key Project – The Richmond Project:

Situated in North Queensland, this project is in its earlier stages than the companies above but promises significant outputs.

  1. Resource Data:The Richmond project has a massive resource estimation of 1.8 billion tonnes, grading at 0.36% vanadium. This translates to approximately 6.7 million tonnes of vanadium.
  2. Production Estimates:RVT is optimistic about the project’s output. The company estimates the potential extraction of 4.2 million tonnes of vanadium ore from this site, which can be processed to produce a substantial 790,000 tonnes of vanadium concentrate annually.
  3. Current Stage:The company is presently at the Bankable Feasibility Study stage, accompanied by an Environmental Impact Statement (EIS). While this indicates that RVT’s project is still in its developmental stages, the data suggests it will be worth the wait.

Investing in the Future

Vanadium’s significance cannot be overstated. As industries continue to recognize its potential and versatility, the demand for vanadium is only set to grow, and with it, the fortunes of the companies that mine and innovate with it.

For astute investors, ASX vanadium stocks represent both short-term and long-term opportunities. They offer a chance to invest in a future where renewable energy is the norm and advanced alloys drive our infrastructure. In this dynamic landscape, vanadium is not just an opportunity; it’s a certainty. Don’t let it pass you by.

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