American Vanadium's 100% controlled, open pit, heap leach Gibellini Project represents one of the lowest cost and most simple vanadium operations to be developed in the world.
The project's NI 43-101 compliant resource represents 131.369 million pounds of measured and indicated vanadium (i.e., vanadium pentoxide or V205) grading at 0.285%, and an additional 48.96 million pounds of inferred vanadium grading at 0.172% (more NI 43-101 details further below).
The Gibellini Project delivered a feasibility study September 2011 and is solidly tracking towards production (subject to permitting), which would make American Vanadium the only primary vanadium mine in the U.S..
The Company is undertaking a feasibility Study basecase under which mine production is projected to average 11.4 million pounds of vanadium pentoxide per year. This will enable Gibellini to potentially supply 5% of current global vanadium demand.
And with the onsite production process designed to yield vanadium pentoxide, the project will create opportunities for off take agreements in the steel industry. Furthermore, since the process already yields vanadium in sulfuric acid in an intermediary step to producing vanadium pentoxide, it is expected that this can be pulled from the process and used directly as an electrolyte for grid scale energy storage.
A scoping study completed by AMEC E&C Services Limited in October 2008 and a feasibility study completed by AMEC E&C Services Limited September 2011 has guided project development.
According to the feasibility study, American Vanadium could potentially become the lowest cost primary vanadium producer in the world with a strip ratio of 0.22 and a unit operating cost of $4.10/lb.
The study's basecase scenario also places the Gibellini Project's after tax IRR at 43%, and after tax NPV at $170.1M at a 7% discount (more feasibility study details further below).
The project is comprised of 232 unpatented lode claims and 7 placer claims totaling approximately 4,254 acres in U.S. state of Nevada, which is ranked among the world's top 10 mining jurisdictions. Opportunities also exist to further expand the project beyond its current definition.
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Historic & Current Exploration
Historic exploration activities on the Gibellini Project have included mapping, trenching, geochemical sampling, metallurgical testing and drilling dating back as far as the 1950s. In all, over 160 holes have been drilled on the property by several operators including Atlas, Noranda and Union Carbide.
In particular, mapping and sampling work by Inter-Globe in Q3 1989 determined that:
- vanadium mineralization occurs in bedrock up to the base of overburden
- the depth of overburden varies from 0.5 feet to 7.0 feet
- most mineralized beds are gently folded and dip at shallow angles
In March 2006, American Vanadium acquired the Gibellini Project, and immediately began exploration activities, including claim staking, geologic mapping and geochemical sampling.
Identification of prospective areas of vanadium mineralization south of the original claim block prompted additional exploration.
Among the Company's exploration activities in 2010 were collecting trenching bulk samples, drilling of 19 RC drill holes, XRF surveying, and development of a new base map.
To support the feasibility study, a metallurgical testing program was conducted on the project. Environmental permitting is underway with biological, cultural and spring/riparian field studies having already been completed.
Feasibility Study & Development Progress
As indicated above, a feasibility study completed by AMEC E&C Services Limited in September 2011 has guided project development.
Complete results of the feasibility study highlights are displayed below:
- Internal Rate of Return (IRR) 43%
- Net present value $170.1 million at 7% discount rate
- Payback 2.4 years
- Average grade 0.302% vanadium pentoxide (V2O5 )
- Strip ratio 0.22 to 1 (waste:ore)
- Mining Operating Rate 3.5 million tons per year (ore and waste)
- Average V2O5 recovery 65.9%
- Average annual production 11.4 million pounds V2O5
- Operating cost $4.10 per pound V2O5
- Capital cost $95.5 million (incl. $10.7 million contingency)
- Average V2O5 selling price $10.95 per pound (Roskill Consulting Group)
- V2O5 selling price range $7.68 - $13.63 per pound (Roskill Consulting Group)
All test work was performed by McClelland Laboratories, of Sparks, NV on samples from the Gibellini property to support the feasibility study. Column leach tests, performed to simulate heap leaching results, indicated life-of-mine average recoveries are 60 percent for Oxide material and 70 percent for Transition material.
AMEC commissioned a market survey by the Roskill Consulting Group Ltd (Roskill) on behalf of American Vanadium to determine an appropriate vanadium price forecast foruse in the Feasibility Study. As a result of the market survey, AMEC utilized Roskill’s Real (US$2010) V2O5 price forecast to support Project economics. The realized selling price over the life of the project was $10.95 per pound of V2O5 sold.
NI 43-101 Report & Resources
American Vanadium's commissioned NI 43-101 report on the Gibellini Project identified the following mineral reserve and resource:
Complete results of the study can be viewed in PDF format by clicking here.
Louie Hill NI 43-101 Report and Resources
In addition to disclosure of the results of the feasibility study on Gibellini Hill, located in the State of Nevada, the Technical Report includes a first-time mineral resource estimate for the Louie Hill deposit. The estimate adds an additional 41 million pounds of V2O5 in the Inferred category at Louie Hill to the total Inferred mineral resources at Gibellini Hill that have previously been announced. The drill total for the Project now stands at over 51,000 feet of drilling from 280 drill holes, completed by both the Company and previous operators. The Inferred resource has not been included in the production schedule or financial analysis of the feasibility study.
American Vanadium intends to conduct both in-fill drilling and further metallurgical testing on the Louie Hill deposit aiming to upgrade this resource. Additionally, significant exploration potential remains in the project area.
Complete results of the study can be viewed in PDF format by clicking here.
Location, Geology & Mineralization
The Gibellini property is located in Eureka County, Nevada, about 25 miles south of the town of Eureka.
The property is situated on the east flank of the Fish Creek Range in the Fish Creek Mining District, and is easily accessed by dirt road extending westward from U.S. Highway 50 (Google Map location | Google Earth location).
The Gibellini vanadium properties occur within an allocthonous fault wedge of organic-rich siliceous mudstone, siltstone, and chert, which forms a northwest trending prominent ridge. Noranda describes these rocks as thin bedded shales, very fissile and highly folded, distorted and fractured (Condon, 1975).
In general, the beds strike north-northwest and dip from 15 to 50 degrees to the west. Outcrops of the shale are scarce except along road cuts and trenches.
The black shale unit that hosts the vanadium resource is from 175 to over 300 feet thick and overlies gray mudstone. The shale has been oxidized to various hues of yellow and orange up to a depth of 100 feet.
The top 100 to 120 feet of the Gibellini vanadium property is oxidized, producing various orange, pink, and purple vanadium oxide minerals. Vanadium grades in the oxide zone are generally higher than in the unoxidized zone, but lower than in the transition zone.
Below the oxidized zone is the transition zone (mixed oxidized and unoxidized rocks), which typically contains the highest grades in the property. An unoxidized zone underlies the transition zone, and is typically lower in vanadium grade than the oxide and transition zones.
