World Class Richmond Vanadium JV Advances to DFS
The Richmond - Julia Creek Vanadium Project is located approximately 50km north-west of Richmond in Northwest Queensland. Richmond is a regional service town of 520 people situated 500km by road to the west of Townsville and 400km east of the mining town of Mt Isa (Figure 1*).
In December 2016, the Company entered a strategic development Joint Venture (JV) with Richmond Vanadium Technology Pty Ltd (RVT). The JV covered Horizon's 100% interest in the Richmond vanadium project comprising 1,550km2 of Cretaceous Toolebuc Formation (Figure 2*)
RVT completed the initial earn in period (A$1 million to earn 25% interest) in March 2018 and has now completed the second stage expenditure commitment of A$5 million over three years inclusive of a Feasibility Study to earn a further 50% interest in the project, with Horizon retaining a 25% interest.
The Pre-Feasibility Study focussed on the higher grade Lilyvale deposit (Figure 2) following the successful infill drilling program in late 2019 comprising 333 aircore holes for 7,817m which resulted in the updated JORC 2012 Mineral Resource estimate of 0.56Bt grading 0.48% V2O5 for 2.6Mt V2O5 at a 0.30% lower cut-off . The Mineral Resource update resulted in improved grades over the previous Mineral Resource Estimate, and importantly led to 76% of the Mineral Resource upgraded to the Indicated JORC Category for estimation of maiden Ore Reserves. In addition, the drilling enabled a large metallurgical sample representative of the orebody for additional concentration and downstream processing testwork to also feed into the Pre-Feasibility Study.
The PFS is based on the following key parameters:
- Vanadium price of V2O5 Flake of US$9.60/lb
- Exchange rates of $US0.73 and RMB4.55 to the Australian Dollar
- Open pit mining operations conducted by contractors
- Ore processed on site to produce a V2O5 concentrate of 1.82% V2O5, railed to port and shipped to China for refining V2O5 flake
- Project implementation and oversight by RVT's team in conjunction with contractors
The key consultants and companies engaged during the Study and their areas of responsibility were:
- Feasibility Study Management Faultzone
- Geology and Resource Estimates RVT
- Mining and Ore Reserve Dr Dawei Xu
- Metallurgical Test work Hunan Nonferrous Metal Research Institute
- Processing facility and infrastructure Faultzone
- Power Study Ergon Energy Corporation Limited
- Hydrology and hydrogeology CDM Smith
- Environmental Epic Environmental Pty Ltd
Key Outcomes of the Pre-Feasibility Study
The key Study outcomes for the project are included in Table 1 below*: The estimated Ore Reserve, which constitutes 100% of the production target, has been prepared by competent persons in accordance with JORC Code 2012.
A total of 8.4Mt of total material is mined per annum, generating 4.06Mt of ore mined from the open pit for concentration. This mining rate yields a nominal mine life of over 100 years at Lilyvale. For the purposes of the economic analysis in the feasibility, a mine life of only 25 years is considered.
The PFS has an annual rate of production of 790,000 tonnes of concentrate, producing 12,701 tonnes of 98% V2O5 flake. Operating costs of A$8.66/lb (US$6.32/lb) include mining, administration, concentration onsite, transport and refining offshore. Capital costs of A$242.2m (US$176.8m) include construction of the concentrator via EPCM inclusive of 20% contingency, in addition to a power station, railway siding, bores, administration and accommodation facilities, and an offshore refining plant. Mining capital is provided by the contractor and amortised into the mining rate.
Consideration for refining onshore was examined in the PFS, costing A$335.8m (US$245.1m) for the refining plant compared to A$111.0m (US$81.0m) in China, therefore was discounted as an option due to a less favourable NPV in comparison to refining offshore, in addition to significantly de-risking the project with a much lower overall capital cost.
*To view tables and figures, please visit:
About Horizon Minerals Limited
Horizon Minerals Limited (ASX:HRZ) is a gold exploration and mining company focussed on the Kalgoorlie and Menzies areas of Western Australia which are host to some of Australia's richest gold deposits. The Company is developing a mining pipeline of projects to generate cash and self-fund aggressive exploration, mine developments and further acquisitions. The Teal gold mine has been recently completed.
Horizon is aiming to significantly grow its JORC-Compliant Mineral Resources, complete definitive feasibility studies on core high grade open cut and underground projects and build a sustainable development pipeline.
Horizon has a number of joint ventures in place across multiple commodities and regions of Australia providing exposure to Vanadium, Copper, PGE's, Gold and Nickel/Cobalt. Our quality joint venture partners are earning in to our project areas by spending over $20 million over 5 years enabling focus on the gold business while maintaining upside leverage.
Horizon Minerals Limited