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Australian Vanadium Limited, robust project economics

Team Veye | 14 Jan 2021 ASX - AVL
Australian Vanadium Limited, robust project economics

Australian Vanadium Limited (ASX: AVL)

Australian Vanadium Limited (ASX: AVL), formerly Yellow Rock Resources Limited) is a mining company focusing on uranium, vanadium/titanium, copper and gold exploration in Australia.

Australian Vanadium Limited (ASX: AVL, “the Company” or “AVL”) on 6 January 2021 announced that through its 100% owned VRFB subsidiary, VSUN Energy, it had engaged CADDS Group to undertake local design and consultancy for its 5kW/30kWh residential VRFB, which recently arrived from China.

(Chart source: TradingView)

AVL had signed an MOU with Chinese VRFB manufacturer Gui Zhou Collect Energy Century Science and Technology Co Ltd, trading as CEC VRFB Co. Ltd (CEC), based in Guizhou province. The MOU included product development for CEC’s residential VRFB for the Australian market.

CADDS Group had been engaged to design a new housing for the VRFB system and to provide potential design changes to improve the battery for Australian residential market conditions. The VRFB will be tested onsite at CADDS with the help of engineering capability from Curtin University.

On successful completion of testing, VSUN Energy plans to deploy the unit to a residential customer with a single-phase system, for tests to be completed in a residential environment with solar energy input.

On 22 December 2020, Australian Vanadium Limited announced an updated Pre-Feasibility Study (PFS) for the Australian Vanadium Project at Gabanintha (“the Project”), near Meekatharra in Western Australia.

(Graphic Source – Company Reports)

Since the release of AVL’s PFS in December 2018, the Company had undertaken key work to improve the Project’s economics and minimise risk. Pilot scale test work performed on samples designed to be indicative of average early years and life of mine process feed, had verified AVL’s process flowsheets and their capability to deliver high quality vanadium products and an improvement in vanadium recovery at industry competitive low operating cost. (Data Source – Company Reports)

 

 

Veye’s Take

Australian Vanadium’s working with CADDS Group to develop the design for the residential VRFB will give it the opportunity to provide feedback to CEC and ensure that the product is ideal for the Australian market. By initiating market growth in smaller systems, it anticipates a knock-on effect for larger VRFB uptake, which in turn will grow the market for vanadium pentoxide in energy storage. AVL’s plans for vanadium electrolyte production also aligns with both Federal and State Governments’ strategies for increasing manufacturing and green energy capability in Australia. The updated PFS for the Australian Vanadium Project reflects robust economics, revised layout and location, updated process design and a new extended Ore Reserve for the Project. The stocks had made “Doji” candle on the price charts at the upper band of the “Bollinger” indicating uncertainty and witnessed a bearish move from there and failed to close above the middle band of the Bollinger. In the month of November, the stock managed to close above the middle band of the Bollinger. The stock made” Higher High” from there along with RSI supporting it with the formation of the positive divergence and MACD entering in the positive territory from there. The candle formation at the top with wick rejecting the downside move indicates the stock hold upside potential with $0.023 posing minor resistance. Veye recommends a “Speculative buy" on “Australian Vanadium Limited” at the current price of $0.019

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