Originally posted by BarrelSitter
So we take the scrapings off the top, possibly mixed with some of the good stuff, for the steel, and use only the good stuff for batteries?
Steel still needs 98%, batteries 99.5%.
My point of my post is I expect vanadium prices to be quite high until 2025. The lower recovery rates at the top in the SS as assumed, if increased in the PFS will be a very good thing obviously, but more importantly if you think about payback periods, when we take out first ore in the oxidised zone, we will be taking it out at quite high prices (meaning strong viability) in the early 2020s (yes I am assuming the PFS will be positive and AVL will go to mining for avoidance of doubt).
By the time other vanadium suppliers come onstream and vanadium prices resettle in the 2020s then we will be (closer to) in the fresh layers where costs will be quite low IMO. According to the SS, our
average costs are around US$4.13 per pound from recollection, meaning IMO for the oxidised layers costs will be 'slightly' higher than the average, meaning when we get to the fresh zones costs will be lower (probably less than US$4 per pound).. I don't expect our cost structures to change too much in the PFS in any event but good to keep the development scenario in your head around payback periods, how to benefit from the higher anticipated vanadium prices to at least 2025, and which layer of the deposit is mined first.
Use in steel accounts for more than 90% of vanadium sales currently, especially with the new rebar standards which from recollection require (at least) as a minimum just under double the vanadium need per tonne of steel and more if require stronger 'earthquaking protection' in certain areas of the country where steel strength standards may be higher. Vanadium use in batteries will further develop in the 2020s IMO, and if we start mining in late 2020/early 2021 we should be closer to the fresh zones when battery takeup takes off IMO IMO IMO (thus providing a secondary revenue stream to AVL).
What I am saying is the mining and pit design and spread can be tailored by AVL in the PFS (i.e. it is a hypothesis I am dealing with in my head) to ensure that you take out more of the oxidised layers when prices are high and you take out the lower layers that have higher recovery when prices stabilise (or as VA has implied when vanadium prices resettle to the US$8 per pound to US$12 per pound range sometime in the future etc etc
IMO
(20min delay)