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Mokopane Vanadium – Drilling to 2016 PFS

The Mokopane Vanadium Project concentrates upon three mineralised zones that rise up to the surface in the Northern Limb of the Bushveld Igneous Complex some 40km North West of the town of Mokopane. These are labelled MML (Main Magnetite), MML-HW (Main Magnetite Hanging Wall) and AB Zone and lie below the PQ and phosphate bearing layers that were initially investigated for their Iron content.

Following initial drilling (17 drillholes) on the PQ and MML zones in 2010-11 a potential Vanadium resource was identified in the MML layer with a 1.24% V2O5 concentration. Further drilling of another 13 drillholes in 2012 confirmed the MML mineralisation with richer (>1.45%) V2O5 holdings in specific sub-bands (MAG3, MAG4) of the MML.

After November 2013 the main focus of the Mokopane project shifted to Vanadium and another 31 drillholes were drilled to fully characterise MML, MML-HW and the lower AB layers.

On the 1st Sept 2014 the Vanadium Project Initial Resource was released. This described the following Vanadium resources:

MML Layer – Initial Indicated Resource  52Mt ore at 1.48% => 767 kT V2O5

MML-HW – estimated >250Mt Ore at 0.3-0.4% => >750kT V2O5

AB Layer not specified yet

On the 12 Nov 2014 the Vanadium Project Resource was updated to increase the MML size and to state the inferred size of the MML-Hanging Wall layer:

MML Layer – Increased Indicated Resource to 63 Mt ore at 1.32% => 833kT V2O5

MML-HW – Inferred Resource stated as 221Mt ore at 0.5% => 1,100 kT V2O5

AB Layer not specified yet

Although the hanging wall layer was a lot lower grade it would need to be removed anyway to be able to get to the MML layer underneath so the additional cost of mining is minimal – however the subsequent Pre-Feasibility Study only considered processing of the higher grade MML Layer, and then only the richer MAG3 and MAG4 layers – (765 kt V2O5).

In mid 2015 Bushveld Minerals was heavily occupied in gaining control of Lemur resources, whilst consultants worked on the Pre-Feasibility Study (PFS) for the Mokopane mine and processing plant.

On the 30 Sept 2015 the AB Layer was specified for the first time :

AB Layer – Estimate specified at 12.5 Mt ore at 0.7% grade => 87kT V2O5

This brought the total V2O5 potentially mineable at Mokopane to 2.02 Mt putting it in the top three of Vanadium projects worldwide.

On the 4 Feb 2016 the Pre Feasibility Study was published.

This only considered an 80m deep opencast pit and processing of the MAG3 and MAG4 layers. With these restrictions a total of 28.6Mt of V2O5 mineralisation at an average concentration of 1.41%  might be mined at a rate of 1 Million tonnes per annum. After concentrating and processing a total of 9,525 tpa V2O5 (99.5% purity) could be produced each year. The capital expenditure for building this plant was calculated at USD 298M and the operation expenditure was estimated at USD 7,210 per Tonne (USD 3,870 per tonne for the salt roast plant only).

It is important to remember that this PFS only describes processing the very best ore from the MML layer – this is only targeting 20% of the V2O5 contained on the Mokopane site. For the lower grades different processing might need to be considered and a higher opex could be expected.

Question: How high is this opex?  Answer: very low, thanks to the very high grades of ore. As can be seen from the graph the current Chinese price of V2O5 is 92,000 RMB/t and rising rapidly – this is equal to 13800 USD/t.

Even with the base mine and processing plant described in the 2016 PFS there is the potential for 6,600 USD/t profit on almost 10,000 tpa = 66m USD per annum profit – a viable commercial proposition in 2016 that is now highly profitable with current Vanadium prices.

The current much higher sales price of Vanadium, and the new demand coming from china for very large quantities of V2O5 (Fangchenggang) suggests that it may now be commercially viable to process V2O5 from the lower grades of ore found in the MML Hanging Wall – also might the AB zone be mined in a separate, shallow pit ? These are both currently open and very interesting possibilities.

[Image of Vanadinite courtesy of Parent Gery, Creative Commons License]

This article only conveys the personal opinion of the author. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. This article does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions.

Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000. See our full disclaimer

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Thank you for visiting the Bushveld Perspective, an archive of opinions from many private investors and commentators on the subject of Bushveld Minerals, which it is completely independent from.

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The content only conveys the personal opinions of our contributors. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000.

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This article only conveys the personal opinion of the author. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. This article does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions.

Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000. See our full disclaimer