Ferro-Alloy Resources Ltd (LON:FAR), the vanadium producer and developer of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, has announced its unaudited interim results for the six months ended 30 June 2024 and provides an update on the results from the testing completed on its carbon concentrate and the Balasausqandiq feasibility study.
Overview
Carbon Concentrate
· Results from the testing of the Company’s carbon concentrate to be produced from the tailings of the Balasausqandiq ore have confirmed the suitability of the concentrate for use in tyre rubber manufacture and other carbon black based rubber applications.
· The testing has shown that the carbon concentrate can be successfully used as a partial substitute for conventional carbon black filler in a passenger car tyre sidewall compound formulation.
· A marketing report quantifying the value proposition of the concentrate is being finalised.
Feasibility Study
· Feasibility study for Phase 1 is ongoing:
o Current focus of the study is on the optimisation of the planned tailings storage facility. Site selection is in progress and preliminary capital estimates have been completed on a staged construction basis to refine initial capital spend.
o Design capacity of the of the Phase 1 process plant has been increased to 1.65m tonnes throughput per year and the comminution circuit design work has been completed.
o Reagent optimisation programme commenced to quantify improvements to the project’s expected operational expenditure.
o In order to accommodate the increased design capacity of the Phase 1 process plant and the reagent optimisation programme, the Company now expects the feasibility study to be published during Q2 2025.
Operations
· The Plant operated well during the period. Production in H1 2024 was slightly lower than H1 2023 due to lower overall grades of vanadium and molybdenum contained within the catalysts processed.
· Commissioned two new drying ovens which allow the conversion of ammonium metavanadate by disassociation into vanadium pentoxide which commands better pricing. The Company is evaluating plans to acquire the equipment to produce vanadium pentoxide flake to access a larger market.
· Test processing of the nickel-rich residues held at the plant site on a commercial scale did not sufficiently replicate the results achieved in the laboratory and consequently the plant will revert to processing bought-in catalysts during Q4 2024. This decision is partly driven by low metal prices. The Plant may resume treating the residues if metal product prices recover.
· Research and development are ongoing to determine the suitability of the nickel-rich residues for the production of ferro-nickel.
Financial
· Total revenues of US$2.1m for the period (H1 2023: US$3.3m) reflect the significant decrease in the price of vanadium pentoxide between the two reporting periods.
· Overall loss for the period of US$3.99m (H1 2023: loss of US$1.53m).
· Cash balance of US$2.5m at the period end and US$1.1m as at 20 September 2024.
Corporate
· During the period, the Company listed and sold a third tranche of bonds with a nominal value of US$5m under the terms of the Kazakhstan Bond Programme on the AIX.
Nick Bridgen, CEO of Ferro-Alloy Resources said:
“The success of the carbon test work programme has confirmed the tremendous value of this product in the manufacture of tyres and in the rubber industry generally. This will be factored into the feasibility study which will also include the increased throughput and reagent optimisation programme.
The current vanadium price is exceptionally low, principally caused by the slow-down of construction in China. This is affecting current results, but the long-term forecasts continue to show a deficit of world production as vanadium redox flow batteries ramp up and China recovers. Historically, when a deficit arises, the price moves up strongly.”
