Horizon, Richmond agree on path to vanadium IPO

Gold-focused Horizon Minerals and joint venture partner Richmond Vanadium Technology have settled on the path forward for the development of the duo’s shared vanadium venture coined the Richmond Vanadium Project in central north Queensland.

The pair have agreed Richmond Vanadium Technology will be the dedicated IPO vehicle to drive the project – in which Horizon holds a 25 per cent interest – to an ASX listing in September or October.

Completion of the sale is expected to occur in the June quarter subject to Horizon completing confirmatory due diligence on its joint venture partner.

Upon completion, the new board of Richmond Vanadium Technology will comprise former Western Australian Member of Parliament Brendon Grylls as Independent Non-Executive Chair, the current Chief Executive Officer Shaun Ren as Managing Director and Horizon Managing Director Jon Price as a Non-Executive Director.

Importantly the deal will see Horizon shareholders receive an in-specie distribution of a portion of Horizon’s share in the IPO vehicle and a priority offering in the IPO.

In March 2022, the 1.8 billion tonne project was stamped with a pre-feasibility study that reads “a technically viable and financially attractive development project”.

Interestingly the pre-feasibility study was based on an initial 20-year mine life – representing only 18 per cent of the maiden ore reserve.

The results show a shallow open-pit mine could churn out 80.4 million tonnes of vanadium pentoxide ore at a diluted head grade of 0.49 per cent with on-site concentration boosting the grade up to 1.82 per cent.

The overall recovery rate comes in at 86.1 per cent and is forecast to produce 251,500 tonnes of 98 per cent commercial-grade vanadium pentoxide with an average annual production of 12,700 tonnes.

At the spot price at the time of the study – $16.44 per pound of vanadium pentoxide – the project generates a net present value of $1.09 billion with an impressive internal rate of return of 62 per cent, with a rapid payback of 1.9 years to boot.

The venture would require a modest up-front capital cost of $243m and operating cash costs of $8.66 per pound of 98 per cent vanadium pentoxide flake.

Horizon Minerals Managing Director, Jon Price said: “…we can now advance the IPO and ASX listing process for this world class project.”

“This comes at a time when the critical minerals sector is clearly in the global frame giving Horizon shareholders excellent exposure to the emerging green energy revolution through a free in-specie distribution of shares in RVT and a priority offering in the IPO.”

The company says work towards a bankable feasibility study is currently being progressed. Importantly, as part of the upcoming study, the company will investigate the potential for onshore refining to produce a final product in Australia for domestic use in the burgeoning battery industry.

Recently, vanadium has been in vogue in the markets with anything associated with the specialty metal garnering serious attention.

Most of the action surrounds the emerging new technology of vanadium redox flow batteries that was interestingly invented and developed in Australia at the University of New South Wales in the 1980s.

As opposed to the lithium-ion variety, vanadium-based batteries excel in servicing large-scale applications and as such has carved out a niche in the new energy economy.

Since the initial patent expired in 2006 companies and research groups have come out of the woodwork to get involved with the innovative technology.

Interestingly the authoritative body Geoscience Australia pegs the nation as hosting the third-largest resource of the specialty metal despite having no operating mines.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au