If you'd like to look at headstock grades, head across to the...

If you'd like to look at headstock grades, head across to the bulks. The grade of the vanadium the ground may be relevant if all market participants were using the same traditional process to extract the vanadium. Near enough 70% of global vanadium supply come from dirty Chinese magnetite ores that they use, in conjunction with the near 1B tonnes of imported hematite annually, to produce steel. Given China’s magnetite grades have decreased to a level where they are virtually unusable given pollution and emission mandates, this is the vanadium production up and comers will be trying to replace.

You then have primary producers like Largo and Bushveld accounting for maybe 20% of the global vanadium market. These guys are using the traditional salt roast method that many of the Australian micro’s like the VAL’s and VR8’s are proposing to use as they progress their early stage feasibilities. I reiterate – EARLY STAGE FEASIBILITY.

You then have secondary producers which is recovery from stockpiles, slags and fly ash account for about 10%.

Then you will have TIVAN which will be a game changing for two industries – primarily for the titanium feedstock and pigment industries and secondarily for vanadium (particularly electrolyte markets and VRB uptake).

On long term price forecasts of $3,600/t, titanium will account for over 63% of TNG revenues (Vanadium ($11.5/lb) = 27% and $102/t = iron 10%). Interestingly titanium looks like it will explode over the next decade and feedstock from mineral sands depletes and could head to over $4000/t. On today’s pricing (T @ $3,200, V $5.5/lb and 64% + iron @ $200/t), vanadium account for a mere 13% of TNG revenues. Titanium is almost 70% and iron about 20%. The best thing vanadium offers TNG hodlers at the moment is a diversified revenue stream from the one resource….great for stress testing by the financiers.

So bang on all you won’t about Mt Peake head grades but you are barking up the wrong tree – TIVAN is and will be a game changer for titanium markets. We are about 8 weeks from getting a FEED with process and product guarantees from SMS essentially removing operational risk from the technology.

But coming back to TIVAN and Vanadium. Agins not forgetting we are about to receive process and product guarantees, TNG’s cost of vanadium production will be the lowest out of the secondary producers and significant lower than the likes of AVL and VR8 et. al.

The CAPEX is incomparable – you are trying to compare projects that are vanadium only with bi-products of iron versus a much larger and revenue diverse project that vanadium is a bi-product to the titanium.

What TIVAN will do for the electrolyte and VRB industry is make the cost of production of vanadium at about current levels which makes to production of electrolyte viable therefore creates a business case for VRB. TNG’s TIVAN (and future licenced TIVAN’s) will still be make $3-4/lb at what will become a very stable industry from a pricing perspective. Other will simply be priced out of ever getting out of feasibility and finance.

For example – AVL

Subscale project with an NPV of less than $1B (not sure how that is bigger and richer).

Inferior IRR (17.5%) with a 7 year payback (inefficient from a cash flow growth perspective)

Inferior C1 production costs and C3 costs...

At current market prices (which aren’t going anywhere once TIVAN is out there) the AVL project will never make money. No financier will touch it and if there are spiks in prices that allow a project like it to get off the ground, it will only ever be marginal.

Anyway – purpose of this post…I’m selling you TNG/TIVAN for the titanium…..not our terrible in ground graded V that will still get to market and the lowest cost in the world.