CMG hails ‘terrific result’ in revised scoping statement

Critical Minerals Group has released a revised statement on the outcome of a scoping study for its Lindfield vanadium project at Julia Creek. It includes a reduction in the net present value for the project to about $510 million (rather than $778 million) and specifies 15-plus years as the life of the operation rather than 25-plus years. CMG still states that the scoping study findings are encouraging and support the conclusion that both the practical and financial attributes existed to develop a successful vanadium mine with a molybdenum trioxide by-product. "With an IRR and positive NPV of approximately 17 per cent 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 said. The company's securities had been suspended from quotation pending the updated release, which it said contained revised and additional information including a production schedule compared to the original announcement on November 1. The potential production of High Purity Alumina (HPA) was not included in the financial analysis, although this may increase the project returns subject to further analysis of the market. The capital estimate included the site infrastructure and processing facility to support a 4 Mtpa ROM production capacity, producing vanadium and molybdenum. Direct capital costs were estimated at about $400 million (excluding indirect costs, EPCM, owners’ costs and contingency), enabling average production levels per annum of about 10,500 tonnes of vanadium pentoxide, and 550 tonnes of molybdenum trioxide. CMG said the study highlighted opportunities which could be investigated to reduce the overall capital cost estimate. It said the scoping study-level results supported a viable vanadium mine, generating an after-tax IRR of approximately 17 per cent, and a positive NPV of about $510 million (assuming USD$9.50 / lb 98.5 per cent vanadium pentoxide, USD$57.5 / kg 99 per cent molybdenum trioxide, FX of $0.68 and royalty rate 2.5 per cent). The revised study is based on mining the TLBB horizon and excludes the TLBA horizon (upper horizon),. CMG said this had been excluded from the mineral resource estimate (due to its lower in-situ grade), but that early processing test work achieved favourable concentrate grades, and as such, it had been identified as an area for further analysis. The production schedule in the revised statement shows that, over 15 years of mine life, 175.5 Mt of waste and 53.9 Mt resource would be mined at a strip ratio of 3.35 t/t. The resource production consists of TLBB 53.9Mt at 0.506 per cent vanadium pentoxide. Resource from the north pit is approximately 24Mt or seven years and from the south pit is 30Mt or eight years. Mine production schedule resource tonnes and grade, from the Lindfield scoping study.

CMG hails ‘terrific result’ in revised scoping statement

Industry Queensland

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