A definitive guide to ASX vanadium stocks (part 1)

By Justin Ware. Published at Oct 31, 2018, in Features

As the world transitions into cleaner sources of energy and rechargeable batteries, new age metals have become a sought after corner of the market.

Vanadium has been the standout energy metal of 2018, its price rising in excess of 450% since this time last year.

Principally used in steel making to add strength via various alloys, vanadium is the most common additive in high strength rebar, offering an exceptional blend of strength, weldability and flexibility.

It also has specialty applications, including in vanadium redox flow batteries (VRFB), which can store large amounts of energy almost indefinitely. In fact, this previously unheralded metal could become a vital part of the renewables revolution.

There’s the huge potential from growth in vanadium redox flow batteries (VFRB), which many believe could be a superior way of storing grid energy generated by renewable energy sources, such as solar or wind generated energy, than traditional or lithium-ion batteries. The features of VRFBs make them attractive for household or small town sized energy storage requirements.

While the vanadium price has already run hard over the past year, the good news for investors who haven’t yet recognised its potential is that global supply will be limited in coming years, while demand is being driven to new highs.

Given that current vanadium supply is largely Chinese, the country’s ability to supply the market is expected to be hampered due to new environmental restrictions. However, China will also be behind much of the increase in demand.

Demand from Chinese steel makers is forecast to rise after a recent mandate to construction companies to use higher tensile strength steel rebar, which is created using vanadium, in construction will directly carry over to increased demand.

The new legislation, which will take effect on November 1, will enforce the adoption of new steel rebar standards, prohibiting the use of substandard steel rods and modernising the country’s future infrastructure projects.

As a result, vanadium prices are skyrocketing.

Source: vanadiumprice.com
Source: vanadiumprice.com

This tightness has driven prices to more than US$33/lb, up from around US$6/lb just 12 months ago.

Vanadium explorers on the ASX

With both tangible short and long term demands at play, vanadium presents some intriguing investment opportunities. There are now around 40 ASX listed stocks that offer exposure to this emerging metal:

  • Audalia Resources (ASX:ACP)
  • Aura Energy (ASX:AEE)
  • Arafura Resources (ASX:ARU)
  • Australian Vanadium Limited (ASX:AVL)
  • Battery Minerals (ASX:BAT)
  • Chalice Gold Mines (ASX:CHN)
  • Energy Metals (ASX:EME)
  • Golden Deeps (ASX:GED)
  • Hardey Resources (ASX:HDY)
  • Intermin Resources (ASX:IRC)
  • Korab Resources (ASX:KOR)
  • King River Copper (ASX:KRC)
  • Lithium Australia (ASX:LIT)
  • Lincoln Minerals (ASX:LML)
  • Liontown Resources (ASX:LTR)
  • Mayur Resources (ASX:MRL)
  • Mount Burgess Mining (ASX:MTB)
  • Marindi Metals Limited (ASX:MZN)
  • Neometals (ASX:NMT)
  • New Energy Minerals (ASX:NXE)
  • Pepinnini Lithium (ASX:PNN)
  • Protean Energy (ASX:POW)
  • Pursuit Minerals (ASX:PUR)
  • QEM Ltd (ASX:QEM)
  • Redstone Resources (ASX:RDS)
  • Rumble Resources (ASX:RTR)
  • Sabre Resources (ASX:SBR)
  • Six Sigma Metals (ASX:SI6)
  • Surefire Resources (ASX:SRN)
  • Southern Cross Exploration (ASX:SXX)
  • Syrah Resources (ASX:SYR)
  • Technology Metals Australia (ASX:TMT)
  • TNG (ASX:TNG)
  • Tando Resources (ASX:TNO)
  • Triton Minerals (ASX:TON)
  • Venus Metals Corporation (ASX:VMC)
  • Vital Metals (ASX:VML)
  • Walkabout Resources (ASX:WKT)

In part 1 of this two part guide, Finfeed has selected seven vanadium stocks that warrant a closer look.

Tando Resources (ASX:TNO)

Market cap: $21.29m

Current share price: $0.105

Tando Resources (ASX:TNO) has recently revealed a string of high-quality assay results from its SPD Vanadium Project in South Africa. The project is located in a known vanadium producing region with Direct Shipping Ore (DSO) potential. The grade profile is one of the highest of all ASX listed vanadium projects.

Tando has completed its Phase 1 drilling program targeted at the established SPD deposit, which currently hosts a Resource of 513mt at 0.78% vanadium.

The company is now testing the surrounding regions for the potential of high-grade vanadium pipes, which could complement a low-cost DSO operation on site.

Whilst it is concentrating much of its efforts on its vanadium project, Tando has three further projects all in Australia. The Quartz Bore Project is a high grade zinc project located in the Pilbara region of Western Australia. The Mt Sydney Project, also in WA, comprises a single exploration licence application in an area prospective for copper, zinc and lead mineralisation. High priority targets have been identified neighbouring Rumble Resources project where there is the potential for a volcanogenic massive sulphide system. The last project in the Pilbara region is Mt Vernon, which also comprises a single exploration licence for the exploration of stratabound zinc-lead-silver and structurally controlled copper-gold mineralisation targets.

New Energy Minerals (ASX:NXE)

Market cap: $8.96m

Current share price: $0.073

New Energy Minerals (ASX:NXE) is one of the key players in the new energy market thanks to the Caula Vanadium-Graphite Project in Mozambique, consisting of two exploration licences, totalling some 16,970ha in area.

Perhaps most importantly, NXE announced a maiden vanadium JORC Measured Resource (mica-hosted 1) of 22Mt at 0.37% vanadium for 81,600 tonnes of contained vanadium pentoxide.

An independent scoping study has now been completed, finding the Caula Project technically and financially viable for mining activities.

Protean Energy (ASX:POW)

Market cap: $7.09m

Current share price: $0.026

Protean Energy (ASX:POW) is focused on the development and commercialisation of promising vanadium tenements in South Korea.

Its flagship Daejon Vanadium Resource is of particular interest to investors, with the company’s recently completed Mineral Resource Estimation expanding the Vanadium Resouce at Daejon to 76Mt, at an average grade of 0.3% vanadium.

POW has also expedited its commercialisation efforts.

In August, the company successfully connected a 25kW/100kWh vanadium battery with WA electricity operator Western Power.

Its Perth-based subsidiary, KORID Energy, has received an A$3m grant to supply its patented V-KOR stack technology to a project dedicated to developing an industry-standard vanadium battery solution in South Korea.

Australian Vanadium Limited (ASX:AVL)

Market cap: $65.32m

Current share price: $0.039

Australian Vanadium Limited (ASX:AVL) is an emerging vanadium producer, primarily focused on developing its Gabanintha deposit in Western Australia.

The Gabanintha deposit is one of the most promising vanadium targets in Australia, comprising a declared Mineral Resource of 175.5Mt at 0.77% vanadium, made up of a Measured Mineral Resource of 10.1Mt at 11.1% vanadium, and Indicated Mineral Resource of 24Mt at 0.63% vanadium and an Inferred Mineral Resource of 141Mt at 0.77% vanadium.

The company recently signed a MOU with the Chinese Win-Win Development Group, which suggests talks around the potential financing and sales deal for the Gabanintha site are well underway.

In addition, AVL’s subsidiary VSUN Energy is dedicated to developing its own vanadium energy storage solutions.

This subsidiary in combination with the company’s ongoing efforts at Gabanintha, makes AVL a story worth watching.

King River Copper (ASX:KRC)

Market cap: $68m

Current share price: $0.055

King River Copper (ASX:KRC) provides an opportune entry for investors seeking exposure to the vanadium market.

The company claims that its Speewah vanadium-titanium-iron Project is the largest vanadium-in-magnetite deposit in the country, with a total measured (indicated and inferred) Resource of 4.7Bt at 0.3% vanadium.

Speewah, which is located in the East Kimberley region of WA, has produced impressive test work results so far, with KRC able to create a 2.1% vanadium magnetite-ilmenite concentrate.

Rumble Resources (ASX:RTR)

Market cap: $16.78m

Current share price: $0.047

Diversified minerals exploration company, Rumble Resources (ASX:RTR) has a strategy of generating and drill testing a pipeline of exploration projects capable of high-grade world-class discoveries.

The company provides exposure to vanadium via its Braeside Project — a high grade zinc-lead-copper-silver-vanadium project in the Pilbara region of Western Australia.

RTR last year completed the first modernised exploration program at the site, executing soil sampling, Helicopter surveys and geological mapping. It completed a total of 61 slimline RC drill-holes completed for 5108m — drill assays are expected by late November.

The company has since partnered with the CSIRO to investigate alteration mineral footprints at the Braeside Project, where exploration remains on going.

TNG Limited (ASX:TNG)

Market cap: $97.18

Current share price: $0.105

TNG Limited’s (ASX:TNG) 100% owned Mount Peake vanadium-titanium-iron Project, located 230km north of Alice Springs, is one of the more developed vanadium prospects, featuring a JORC compliant Resource of 160Mt at 0.28% vanadium.

The project comprises five granted exploration licenses and four Mining Lease applications.

An updated Feasibility Study and Financial Model for the Mount Peake Project has been completed, confirming a robust business case for project development.

TNG is in advanced financing discussions and has successfully signed three off-take agreements over the life-of-mine.

In part 2 of this guide we’ll take a closer look at VRFBs and touch on more ASX vanadium plays.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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