Shareholders back midwest vanadium merger

Vanadium explorer Technology Metals Australia has won support of major shareholders for a $217 million merger with fellow critical minerals company Australian Vanadium Limited.

TMT on Tuesday revealed 26 per cent of its shareholders – including Resource Capital Funds which holds an 18 per cent slice of the company – had backed merging the neighbouring firms into one entity under the AVL brand.

TMT’s Murchison project boasts a 153.7-million-tonne resource and 44.5-million-tonne mineral reserve at 0.89 per cent vanadium oxide.

AVLs’ adjacent namesake project has a 239-million-tonne resource and 30.9-million-tonne ore reserve going at 1.09 per cent vanadium oxide.

TMT managing director Ian Prentice said the merger would help to progress the Gabanintha vanadium orebody, which he described as “one of the best undeveloped vanadium resources in the world”.

“TMT and AVL believe the merger will help accelerate the development of the combined project to the benefit of both sets of shareholders,” he said.

“This all comes at a pivotal time for the global vanadium industry as vanadium flow batteries are established as a critical player in the long duration energy storage market, a key requirement for the world’s transition to net zero and a cleaner future.”

If approved, TMT shareholders would hold about 42 per cent of the company.

Mr Prentice would join AVL management. Mark McGowan’s former chief of staff and TMT non-executive director Jo Gaines would continue her role for AVL.

AVL chief executive Graham Arvidson said consolidation of the two companies was logical.

“The combination of Australian Vanadium and Technology Metals Australia is transformational for both companies,” he said.

If successful, the transaction will create the leading ASX listed vanadium developer and a world-class asset of scale located in a Tier-1 mining jurisdiction.

“The transaction will leverage the best of both organisations, including best in class technical work, assets and people, and will result in AVL becoming the leading force in the Australian vanadium sector.”

AVL separately announced a $15 million institutional placement to the ASX to fund “project and corporate initiatives” during the transaction.

The two companies are eyeing the vanadium redox flow battery market which are better suited to stationery uses such as grid energy storage than lithium-ion batteries.

VFRBs have a significantly longer lifespan, higher energy capacity and longer discharge time than lithium-ion, but are much larger.

AVL plans to build a processing plant between Geraldton and Mullewa, which was initially tipped to open in 2023, and owns VSUN, a redox flow battery seller.

The transaction, if approved, is expected to be finalised by February 2024.