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https://thewest.com.au/business/min...adium-and-technology-metals-chiefs-c-12834349



Work to be done convincing shareholders on merger, say Australian Vanadium and Technology Metals chiefs

Adrian RausoThe West Australian
Fri, 8 December 2023 3:48PM




Technology Metals' chief executive Ian Prentice. Credit: Supplied


A tie-up between WA’s two major vanadium players is the “most logical consolidation in the mining industry” their CEOs say, but they face an uphill battle convincing shareholders.

Australian Vanadium and Technology Metals Australia share the same vanadium-rich orebody around 40km south of Meekatharra in the State’s mid-west, which will be packaged together under a proposed merger.
The union was announced as a $217 million deal in September and will result in Technology Metals shareholders receiving 12 Australian Vanadium shares for each share held.

Speaking at a media briefing on Friday, Technology Metals chief executive Ian Prentice said the tie-up makes “complete” sense.
“It’s probably the most logical consolidation you can imagine in the mining industry,” he said.
“I liken it somewhat to what Pilbara (Minerals) and Altura (Mining) should’ve done.”

His counterpart Australian Vanadium boss Graham Arvidson said he agreed the deal was “extremely logical” and also pointed to the Pilbara and Altura saga.
Pilbara and Altura’s flagship lithium projects — both called Pilgangoora — were adjacent to each other. A merger between the two never eventuated and while Altura went under in 2020, Pilbara survived and swallowed up Altura’s project before riding the lithium boom to become an $11 billion company.

“Building these critical minerals project isn’t easy, so I think a really important factor in us coming together is that it takes a lot of capital to develop a project like this ... and there’s limited pools of capital,” Mr Arvidson said.



Australian Vanadium chief executive Graham Arvidson Credit: Mad Photography/Supplied.


The proposed merger will be put to a vote with Technology Metals’ shareholders on January 16 and will essentially require a 75 per cent vote in favour. Despite the alignment of the two CEOs, the deal faces an uphill battle to get the shareholder green light.

Around 16.9 per cent of shareholders have said they intend to vote against the deal, while 26 per cent have given it the thumbs up.

“There’s still some work to do with those shareholders (against the deal or undecided), absolutely,” Mr Prentice said.
“Our job is to be selling this, convincing people the merits of coming together.”

Neither CEO would comment on whether they would be keen to sweeten the offer for Technology Metals’ shareholders to push the merger through.

The share prices of Australian Vanadium and Technology Metals have been stung since mid-2022 by falling prices for vanadium, a key input in reinforced steel bars. The production of steel rebars in China has slumped in recent years Mr Arvidson says, although steel production more broadly has been solid, as evident by the buoyant iron ore price.

About 10 per cent of vanadium production is used in renewable energy batteries and Mr Prentice says if the current trend continues that figure will jump up to around 50 per cent by 2030.
The vanadium hopefuls are banking on the widespread adoption of the commodity in long-life renewable energy storage products, predominately vanadium redux flow batteries.

Vanadium redux flow batteries have a longer life than lithium-ion batteries and are more suited to large-scale energy storage, which remains a nascent sector.