VanadiumCorp to benefit from rising vanadium spot prices

Vanadium was first discovered in 1801. It was mistaken for chromium and wasn’t rediscovered for another 30 years. One of the most important industrial uses of vanadium is in the making of steel alloys, added in small quantities, as little as 0.15% vanadium is proven to double the strength of the alloy. This steel is used to make special tools and equipments. It is used in steel rebar, car gears, crank shafts, pipes and tubes in the chemical industry etc. In most recent years vanadium has emerged as a useful mineral for energy storage batteries. Henry Ford was one of the first exponents of the metal, using it to strengthen the Model T – the car credited with introducing the automotive industry to the masses in the early 1900s. Fast forward to today as the EV boom is taking off, vanadium is also booming due to its use in steel rebar and vanadium redox flow batteries. The world is slowly transitioning away from fossil fuels, and the metal could have a big role to play particularly in large scale energy storage.

Vanadium spot prices have almost tripled over the past year, while many other EV and base metals have recently fallen; vanadium continues to rise in value. China’s new steel rebar rules requiring vanadium is the main reason.

VanadiumCorp Resource Inc. (TSXV: VRB) intends to become the leading vanadium supplier to the emerging vanadium battery market for grid level and renewable energy storage. The Company is located in Quebec, Canada. VanadiumCorp’s proprietary breakthrough process is 100% green with unprecedented recovery of metal value. Further advantage is 100% ownership and development of two of the purest deposits in the world.

Lac Doré Vanadium Project

The Company’s flagship 100% owned Lac Dore project spans over 45 km2 and is located close to the mining town of Chibougamau in mining friendly Quebec, Canada. Their current NI 43-101 vanadium resource measures 621 million lbs V2O5 from VTM concentrate grading 1.08% V2O5. Mineralization is at surface, open at depth and along strike, with nearby infrastructure such as road, rail, 161Kv power, workforce, water and a local airport. The Company also has another smaller project known as the Iron-T Vanadium Project also in Quebec, and royalties on the Raglan Nickel-PGM mine.

Lac-Dore claim map

President and CEO of VanadiumCorp Adriaan Bakker states: “The biggest opportunity in the vanadium market is really in energy storage. We identified some key facts in the vanadium market. Number one being vanadium electrolyte that is required by batteries is a non-existent commodity. It is created by an offshoot of production from the steel industry from this inefficient type of production. There is just not enough vanadium available to go into energy storage.”

VanadiumCorp and Electrochem Process Technology (“VEPT”) (patent-pending) have partnered to develop a chemical process method applicable for vanadium, iron and titanium. This will allow them to explore innovative new approaches by utilizing half the conventional energy and featuring a negligible carbon footprint that will address the industry challenges and the global shortage of battery grade vanadium.

VanadiumCorp has a good sized resource, with exploration upside, currently supported by very strong vanadium spot prices. For now their patent pending technology is not showing any value on the market, once proven successful at scale it will add significant value to the Company. The market is currently awaiting the updated Preliminary Economic Assessment [PEA] which will give investors a better idea of the project economics. On June 11, 2018 VanadiumCorp received by email a notification of a cease trade order. As a result, VanadiumCorp will remain cease traded by the BCSC Commission until the newly authored PEA can be filed. Stay tuned.

New processing technology recovers 95%+ of VanadiumCorp’s metal value

VanadiumCorp Resource Inc. (TSXV: VRB) 100% owns the Lac Dore Vanadium-Iron-Titanium project in Quebec, Canada. The Company also has another smaller project known as the Iron-T Vanadium Project also in Quebec, and royalties on the Raglan Nickel-PGM mine.

The Company is looking to take a vertically integrated approach. They are also developing leading process technologies ‘VanadiumCorp-Electrochem Processing Technology’ and ‘Electrochem globally patented Electrowinning’ technology.

The Lac Dore project spans over 452 km as shown below.

Lac Dore location map

The NI 43-101 vanadium resource estimate is 99.1Mt @ 0.43% V2O5 (Inferred), or 1.08% V2O5 in magnetite concentrate. Mineralization is at surface and open at depth and along strike. The contained vanadium resource is 282,370 tonnes V2O5 in magnetite concentrate. Vanadium recovery from magnetite concentrate is 95% indicating favorable metallurgy.

VanadiumCorp’s 100% owned Vanadiferous titanomagnetite (‘VTM’) resource at the Lac Dore Project represents ideal feed stock for the new carbon free and efficient process developed by VanadiumCorp & Electrochem. Of significance, the conventional primary process recovery from magnetite concentrate averages 1.0% V2O5, and the new process recovers 95%+ of ALL metal value including titanium and iron. Clearly this is very helpful towards the project’s economics.

Adriaan Bakker, CEO of VanadiumCorp states, “The advantage of monetizing all three metals from VTM provides a distinct advantage for our 100% owned VTM resources in Quebec and joint licensing opportunity of the technologies worldwide. Our collaboration with Electrochem first began by addressing the industry need for a better process method for vanadium electrolyte. Utilizing a custom reactor and combining technologies, Phase II testing and trial production subsequently confirmed the ability to process magnetite regardless of origin and various feed stocks that many companies had considered waste until now.”

The November 2017 PEA resulted in an after-tax Net Present Value (NPV) of C$814M, post inflation but not discounted. The after-tax Internal Rate of Return (IRR) is 15.42%. Life of Mine (LOM) is 20 years, requiring 64% of the presently known inferred resources with an after-tax payback period of 6 years after start-up. CapEx is estimated at C$321m. The Company plans re-filing an amended PEA technical report for its Lac Dore Project by early June 2018.

The Lac Dore project is close to all infrastructure (road, rail, 161Kv power, workforce, water, and airport). It is also close to the mining town of Chibougamau, located in mining friendly Quebec, Canada.

Near term catalysts include the amended PEA, further developments with Ultra Power Systems Limited to pursue the joint interest of commercializing and deploying Vanadium Redox Flow Batteries (VRFB) for microgrid applications. Other possible catalysts would include any off-take announcements or project financing as well as any licensing agreements.

Market Cap is currently C$23m. The resource size is good, with exploration upside and the PEA is currently being amended. For now the market is not really giving any value for their patented technology, which once proven successful at scale will add significant value.

In conclusion, VanadiumCorp has an excellent growing resource in the safe and mining friendly jurisdiction of Quebec Canada. Additionally, VanadiumCorp offers a new processing technology that recovers 95%+ of all the metal value in their ore, and has potential for licensing revenues. All eyes will be on the updated PEA to be out very soon.