TIDMFAR
RNS Number : 6575F
Ferro-Alloy Resources Limited
16 July 2019
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
Ferro-Alloy Resources Limited / Index: LSE / Epic: FAR / Sector:
Natural Resources
16 July 2019
Ferro-Alloy Resources Limited
("Ferro-Alloy" or "the Company")
Operations Update: Record Production Achieved
Ferro-Alloy Resources Limited, the vanadium mining and
processing company with operations based in Southern Kazakhstan, is
pleased to announce a production update on its existing vanadium
concentrate processing operation (the "Existing Operation").
Overview:
-- 55% year-on-year increase in total production at the Existing
Operation; production of vanadium pentoxide for H1 2019 totalled
71.5 tonnes
-- Incremental improvements to Existing Operation already
stepping up production; record monthly production of vanadium
pentoxide achieved in June 2019 of 17.6 tonnes
-- Building expansion and installation of new equipment to be
completed Q3 2019 resulting in an anticipated significant increase
of production during Q4 2019
-- Continuing development of the large Balasausqandiq Vanadium
Project; with a reserve of 70 million tonnes and NPV of $2 billion
at a long-term forecast vanadium pentoxide price of $7.50/lb
Nick Bridgen, CEO, commented: "The expansion work at our
existing vanadium concentrate processing operation is paying
dividends resulting in a 55% increase in production over last year
and increasing further from the level at the beginning of this
year. There is still expansion work to be completed and new
equipment to be installed that we anticipate will result in a
significant step up in production in the final quarter of this year
and in the first half of 2020. The Existing Operation provides a
valued source of revenue for the Company that can be utilised for
further general project development.
"The work at the Existing Operation is a stepping stone to the
development of the Balasausqandiq Vanadium Project, with its
reserve of over 70 million tonnes estimated on a locally required
basis and NPV of $2 billion at a long-term forecast vanadium
pentoxide price of $7.50/lb. The size of our deposit and our unique
ore mean there is the potential to be one of the world's largest
and lowest cost producing vanadium mines, and the growing demand in
the vanadium market, particularly with the increasing usage of
vanadium batteries in clean energy storage, puts Ferro-Alloy in a
very attractive position to capitalise on this opportunity."
The Existing Operation
Production was maintained throughout H1 2019 with only minor
interruptions in spite of significant levels of improvement and
capital development work being carried out within the existing
process plant. Installation of new equipment and the renovation of
the existing belt filter meant that plant availability averaged
only some 75% in the period, though overall total production
reached 71.5 tonnes representing a 55% year on year increase in
comparison with H1 2018. The cumulative effect of the improvements
resulted in record monthly production in June of 17.6 tonnes of
vanadium pentoxide.
Production and shipment of vanadium pentoxide (contained in
ammonium metavanadate)
Six months to 30 June
-------------
2019 2018 Year-on-Year FY 2018
Increase
----------- ------------- --------
Production (tonnes) 71.5 46.0 25.5 125.0
----------- ----------- ------------- --------
Shipments (tonnes) 79.6 51.8 27.8 130.0
----------- ----------- ------------- --------
Shipments are included for which title has passed to the buyer
according to IFRS 15
Shipment and production are subject to minor adjustment upon
receipt by the buyer and independent assay which can be several
months after the period end
Work to further expand and improve production at the Existing
Operation continues apace including the:
-- construction of a 990m(2) extension to the plant facility;
-- installation of electrometallurgical and recrystallisation equipment;
-- construction of a 15,000m(2) evaporation pond;
-- construction of a connecting line and transformer station to the adjacent 110 kV power-line;
-- addition of substantial new equipment to increase capacity of
existing production processes; and,
-- construction of supporting worker accommodation
Equipment delivered to site during H1 2019 includes:
-- a rotating pre-roasting furnace for the pre-roasting of concentrates;
-- a second main concentrate roasting oven;
-- a furnace for the decomposition of ammonium metavanadate ("AMV") into vanadium pentoxide;
-- three new 16 cubic meters tanks with cooling systems for
increasing the capacity for sedimentation of AMV;
-- two new 16 cubic metre tanks with steam heating for the
leaching with sodium carbonate of vanadium concentrates;
-- a new 16 cubic metre tank for the preliminary leaching of roasted vanadium concentrates; and,
-- a new press-filter
Incremental expansion and improvement work already completed has
already resulted in record production reported in June 2019.
Completion of the building expansion and installation and
commissioning of the new equipment is targeted for around the end
of Q3 2019 resulting in an anticipated significant increase in
production in Q4 2019. Final stage of expansion to commence in Q4
2019, expected to result in another increase in production in H1
2020.
For further information, visit www.ferro-alloy.com or
contact:
Ferro-Alloy Resources Nick Bridgen (CEO) info@ferro-alloy.com
Limited
Shard Capital Partners
LLP
(Corporate Adviser
& Broker) Dr Wang Chong +44 207 186 9948
St Brides Partners
Limited
(Financial PR & IR Catherine Leftley/Gaby
Adviser) Jenner +44 207 236 1177
Further information about Ferro-Alloy Resources Limited
The Company's operations are all located at the Balasausqandiq
Deposit in Kyzylordinskaya Oblast in the South of Kazakhstan.
Currently the Company has two main business activities:
(a) the high grade Balasausqandiq Vanadium Project (the "Project"); and
(b) an existing profitable vanadium concentrate processing
operation (the "Existing Operation")
Balasausqandiq is a very large deposit, situated in
Kyzylordinskaya Oblast in Southern Kazakhstan. The ore contains
vanadium as the principal product, together with by-products of
carbon, molybdenum, uranium, rare earth metals, potassium, and
aluminium.
A reserve on the JORC 2012 basis has been estimated only the
first ore-body number which amounts to 23 million tonnes, not
including the small amounts of near-surface oxidised material which
is in the Inferred resource category. The Reserves are estimated to
be over 70m tonnes in ore-bodies 1 to 5 but this does not include
the full depth of ore-bodies 2-5.
There is an additional existing concentrate processing operation
is situated at the site of the Balasausqandiq Deposit. The
production facilities were originally created from a 15,000 tonnes
per year pilot plant which was then adapted to treat low-grade
concentrates and is now in the process of being expanded and
further adapted to treat a wider variety of raw-materials.
The Company has already completed the first steps of a
development plan which is expected to result in annualised
production capacity increasing gradually to around 1,500 tonnes of
contained vanadium pentoxide. The development plan includes
upgrades to infrastructure, an extension to the existing factory
and the installation of equipment to increase the throughput and to
add the facilities to convert AMV into vanadium pentoxide.
The strategy of the Company is to develop both the Existing
Operation and the Project in parallel. Although they are located on
the same site and use some of the same infrastructure, they are
separate operations.
This information is provided by RNS, the news service of the
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Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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