Horizon Minerals advances Richmond-Julia Creek JV vanadium project to DFS stage on strong price outlook

Horizon Minerals Ltd (ASX:HRZ) has confirmed it will progress to a definitive feasibility study (DFS) for the Richmond-Julia Creek joint venture vanadium project in Queensland in 2022. The news follows an updated pre-feasibility study for the Lilyvale higher-grade component of the project, forecasting production of 12,701 tonnes of 98% vanadium pentoxide (V2O5) flake per year and a net present value of $613 million. Horizon’s JV partner, Richmond Vanadium Technology (RVT), has now completed a $6 million earn-in, with Horizon retaining a 25% interest. "Globally significant supply" Horizon managing director Jon Price said the Richmond-Julia Creek JV project had the potential to play a major role in the global vanadium supply chain. “It is one of the largest undeveloped oxide vanadium resources in the world and can produce globally significant supply for both the steel and emerging energy storage markets,” he said. “Restricted supply and increased demand have resulted in a sustained increase in prices with the initial 25-year mine life at Lilyvale generating an NPV of A$613 million at current spot prices. “What sets this project apart is its minimal impact on the environment with shallow open pit mining, progressive rehabilitation, low capex, conventional processing and first quartile operating costs.” Updated PFS details The updated PFS is based on a 25-year mine life, compared with a 20-year life in the previous study, and demonstrates a financially strong project highlighted by: Shallow low impact open pit mining producing 101.5 million tonnes of oxide ore at a fully diluted grade of 0.49% V2O5 for 19.75 million tonnes of 1.82% V2O5 with concentrate production on-site; Refining overall recovery at 86.1% produces 317,500 tonnes of 98% V2O5 commercial-grade flake with average annual production of 12,700 tonnes of V2O5; Modest up-front capital costs of A$242.2 million (US$176.8 million) and operating cash costs of A$8.66/lb (US$6.32/lb) of 98% V2O5 flake; and At current spot price of A$13.15/lb (US$9.60/lb) V2O5, project generates NPV10% of A$613.0 million (US$447.5 million) with IRR of 38% and a payback of 3.2 years. Both the mineral resource (560 million tonnes at 0.48% V2O5, for 2.6 million tonnes V2O5 at a 0.30% lower cut-off) and the maiden open pit ore reserve (459.2 million tonnes at 0.49% V2O5 for 2.25 million tonnes of contained V2O5 product) at the advanced Lilyvale deposit within the project area remain unchanged from the earlier PFS. Vanadium produced from primary ore sources is uncommon due to sub-economic grades, with ore typically originating from magmatic sources, although sedimentary mineralisation ore enriched with vanadium also occurs to a lesser extent, such as the Richmond-Julia Creek Vanadium Project. Onto the DFS Horizon and RVT will now advance the project to the definitive feasibility stage for completion in 2022, inclusive of offtake arrangements and all environmental and statutory approvals for project development. “We look forward to the completion of the DFS in 2022 and believe the project can have significant economic development benefits to regional Queensland and the national economy,” Price said. - Daniel Paproth