Growing High Strength Steel Sector Set to Surge Vanadium Demand Upward
FN Media Group Presents Microsmallcap.com Market Commentary
New York, NY – May 21, 2019 – Key drivers for the steel-strengthening metal vanadium continue to point towards increased demand for the foreseeable future. A new research report evaluating recent trends and growth opportunities projects the global vanadium market size to exceed 100kilotons by the end of 2025, growing at a CAGR of 5%. In anticipation of the metal’s continued rising demand, several projects are underway from vanadium companies including Delrey Metals Corp (OTC:DLRYF) (CSE:DLRY), Largo Resources (OTC:LGORF) (TSX:LGO), Victory Metals (OTC:VKMTF) (TSX.V:VMX), Bushveld Minerals Limited (OTC:BSHVF), and Prophecy Development (OTC:PRPCF) (TSX:PCY).
According to another recently published report from Acumen Research and Consulting, the overall vanadium market size is expected to be worth approximately US$ 56 billion by 2026—giving plenty of time for the development of new projects such as the notably large Four Corners project in Newfoundland dubbed to be “one of the largest easily accessible vanadium projects in North America.”
The 5,157-hectare property is being developed by Delrey Metals Corp (OTCPK:DLRYF) (CSE:DLRY), who, through exhaustive research for private vanadium assets with the right ingredients for production potential, came across this advanced stage exploration project. Perhaps, more importantly, positive studies and reports from over 4000 meters of drilling and over $2.3mm spent, show the potential for 16km of vanadium – iron – titanium mineralization on the property.
Four Corners is one of the multiple up-and-coming projects from around the world, including other North American projects, such as the two Nevada projects: Gibellini Vanadium Project developed by Largo Resources, and the Iron Point Vanadium Project from Victory Metals.
Across the ocean in South Africa, Bushveld Minerals has been accumulating several vanadium production assets in the country, including Vanchem Vanadium Products, and South African Japan Vanadium (a ferrovanadium production business).
Meanwhile, in Bahia State, Brazil, Largo Resources is coming off a record-breaking 2018 at its Maracás Menchen Mine. Having successfully ramped up its vanadium operations since 2014, Largo reported revenues of CAD$521.4 million—a 211% increase, year over year.
Much of the growth in vanadium’s demand is attributed to higher demand in the steel industry, particularly in new stringent Chinese rebar standards. However, there has also been a major increase in the development of vanadium redox flow batteries (VRB’s) for large scale storage of wind and solar generated energy.
Adroit Market Research points to astounding growth in the VRB market. A recent forecast by the analytics company pegged VRB market growth at 59.7% CAGR to eventually hit US $1.11 billion by 2025.
Potential New Vanadium to Come from North America
In 2012, ahead of the most recent vanadium price surge, global firm SRK Consulting initiated work on Delrey Metals Corp’s (DLRYF-DLRY) Four Corners project located in western Newfoundland.
SRK’s initial metallurgical results yielded an impressive >90% Vanadium Pentoxide and >80% Titanium Dioxide recovery. The potential of the project is enhanced when combined with historic work that the private property vendors estimated could potentially contain up to 2.37 billion tonnes of vanadium-bearing titaniferous magnetite from one of the five zones. It is important to note this work is preliminary and needs to be expanded on and confirmed to bring it into 43-101 guidelines and used for reference only, but it gives Delrey a solid footing to begin work from. Further historic work on the property shows a mineralized strike length of 16km with two highways and power lines intersecting the property, and a nearby commercial town and deepwater port allowing for easy exploration and development.
Historic select surface sampling across the mineralized zone assayed >40% Iron, 5% Titanium, and 0.30% Vanadium Pentoxide with individual assays returning as high as 56.92% Iron, 15.13% Titanium, and 0.39% Vanadium Pentoxide.
Delrey just announced the signing of a definitive agreement for the option to earn 80% of the Four Corners Project and still has a market cap of around $6mm CDN. Considering the ample work on the Four Corners project and it’s potential, and the historic showings and recent confirmation of this on their BC vanadium – iron – titanium projects, the story should be well received by investors as news is released.
“This latest acquisition provides further exposure for Delrey and its shareholders within the battery metals sector, which is driving the global change in energy storage,” said Delrey’s President and CEO, Morgan Good in the latest press release. “We’re excited to be in a strong position with the Four Corners Project acquisition in a favorable jurisdiction like Newfoundland and Labrador, as the potential size and scale of this asset are remarkable.”
Further International Vanadium Developments
Much of the recent excitement in the vanadium has come from Largo Resources (OTCQX:LGORF) (TSX:LGO). The heightened production from the Maracás Menchen Mine in Brazil has been quite impressive, as the company has focused its efforts completely on the production of vanadium flake, high-purity vanadium flake, and high-purity vanadium powder. The company’s CAD$521.4 million was a record breaker, putting forth an impressive 211% year over year increase.
Looking to become a large-scale battery storage contender, Bushveld Minerals (OTC:BSHVF) recently doubled down to significantly increase its vanadium production. Following the completion of a series of South African deals, the low-cost integrated miner added the Vametco vanadium mine and processing plant which is currently in phase 2, to complement its own energy storage subsidiary that’s part of its strategy to develop deeply its deeply integrated vanadium business.
Back in April, Victory Metals (OTCPK:VKMTF) (TSX.V:VMX) demonstrated >90% vanadium recovery at its Iron Point Project in Nevada, using a hydrometallurgical leach process. Utilizing test work conducted by McClelland Laboratories demonstrated recoveries up to 94.3% vanadium recovery within 8-hour leach times.
Following a meeting with regulators in late April, Prophecy Development (OTCQX:PRPCF) (TSX:PCY) estimates Q1 2020 as the target date for publication of the Notice of Intent (“NOI”) to prepare an Environment Impact Statement (“EIS”) in the Federal Register for its Gibellini Vanadium Project in Nevada. Based on this timeline, Prophecy plans to start mine construction in 2021, and begin vanadium production by Q4 2022.
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