{"id":4440,"date":"2024-01-16T05:48:11","date_gmt":"2024-01-16T05:48:11","guid":{"rendered":"https:\/\/economicherald.net\/?p=4440"},"modified":"2024-01-16T05:48:11","modified_gmt":"2024-01-16T05:48:11","slug":"monsters-of-rock-could-this-logical-merger-finally-get-australias-vanadium-sector-off-the-ground","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=4440","title":{"rendered":"Monsters of Rock: Could this logical merger finally get Australia\u2019s vanadium sector off the ground?"},"content":{"rendered":"

\u00a0<\/p>\n

Two vanadium players who own three parts of effectively the same orebody in WA\u2019s Mid-West will merge<\/strong>
\nTechnology Metals Australia shareholders resoundingly voted up a 14-for-1 deal that will see the company merge with Australian Vanadium via a scheme of arrangement<\/strong>
\nMiners pulverised in red day on ASX<\/strong><\/p>\n

\u00a0<\/p>\n

Over in Perth Technology Metals Australia (ASX:TMT)<\/a> shareholders have gathered to vote up a merger that will see a single orebody separated by a tenement boundary pulled together in the hope it can spark a new WA industry into life.<\/p>\n

They voted up a deal that will see them receive 14 Australian Vanadium (ASX:AVL)<\/a> shares for every TMT share they hold, a mark-up from an initial 12-for-1 offer that will give TMT investors 42% of the merged company if the WA Supreme Court approves the scheme.<\/p>\n

It is, so to speak, a deal that makes sense.<\/p>\n

Regardless of the possible financial value for shareholders, whatever that is down the line, it cuts across the illogic of having a single deposit effectively split in half by the vagaries of a tenement boundary.<\/p>\n

Located in the Mid-West, the Resource Capital Funds backed firms were each planning to construct their own Gabanintha project.<\/p>\n

Here\u2019s what that would have looked like.<\/p>\n

Pic: TMT presentation<\/p>\n

TMT\u2019s two resources, Gabanintha and Yarrabubba, coming in at a combined 153.8Mt at 0.8% vanadium pentoxide literally sandwich AVL\u2019s own Gabanintha orebody of 239Mt at 0.73% V2O5.<\/p>\n

Two plants doing the same thing literally kilometres from one another as well. AVL has some additional benefits, including a $49 million grant from Canberra to support the development of its proposal, awarded back in 2022.<\/p>\n

V2O5 prices spiked incredibly from long term lows of around US$2.50\/lb to almost US$30\/lb in a brief boom in 2018 only to slide back to long term levels aside from a run to more than US$12\/lb in the commodity run following Russia\u2019s invasion of Ukraine in March 2022.<\/p>\n

They have since fallen back to around US$6\/lb. The vast bulk of the end market for vanadium is as a steel additive to create hardy materials like armour plate, axles and tools, but the biggest growth sector is in battery storage applications.<\/p>\n

A bankable feasibility study in 2022 put a C1 operating cost of US$4.43\/lb on the Australian Vanadium Project, estimating it would cost US$435m ($604m) to construct the project containing a mine, concentrator and separate process plant near Geraldton producing 24.7Mlb of V2O5 and 900,000t of FeTi co-product each year over an initial 25-year mine life.<\/p>\n

The second court hearing to approve the deal is due to take place on January 19.<\/p>\n

$68m TMT\u2019s shares rose 6% in late trade, while $100m capped AVL was unchanged.<\/p>\n

\u00a0<\/p>\n

Technology Metals Australia (ASX:TMT) and Australian Vanadium (ASX:AVL) share price today<\/h2>\n\n

<\/span>\u00a0<\/p>\n

\u00a0<\/p>\n

And on the markets<\/h2>\n

A decision from China not to cut interest rates to stir up its economy seems to have helped tank the materials sector on a rough day on the bourse.<\/p>\n

The big miners fell 1.52% with South32 (ASX:S32)<\/a>, Fortescue (ASX:FMG)<\/a> and Evolution (ASX:EVN)<\/a> among the hardest hit, copping 4.21%, 2.17% and 3.35% downgrades respectively.<\/p>\n

Mid-tier miners fared little better, with high grade iron ore producer Champion Iron (ASX:CIA)<\/a> among the biggest laggards at a 4.18% drop, with only some bullishness around Pilbara Minerals (ASX:PLS) <\/a>and a bizarre 20% lift at do nothing uranium clean up play<\/a> Energy Resources of Australia (ASX:ERA)<\/a> lighting up the mining space.<\/p>\n

\u00a0<\/p>\n

Monstars share prices today<\/h2>\n\n

<\/span>\u00a0
\n<\/span><\/p>\n

The post Monsters of Rock: Could this logical merger finally get Australia\u2019s vanadium sector off the ground?<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

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