Ferro-Alloy Resources Limited (LON:FAR) said it expects to resume production of acid-recovered vanadium concentrates this month as coronavirus restrictions in Kazakhstan are eased.
The company owns the Balasausqandiq project in Kazakhstan, where it is producing vanadium concentrates and working on a feasibility study to assess the potential of the whole site.
Output of vanadium pentoxide in concentrate rose to 49.1 tonnes in the first three months of 2021, with 61 tonnes shipped.
A new production line came on stream in February, though due to the closure of the acid-recoverable treatment process for low-grade concentrates in March 2020, this is the group’s sole operation until acid recovery restarts. Capacity of the two lines will be 40 tonnes per month, but below this in the early stages.
Ferro-Alloy also noted that work on a feasibility study has been slowed by the coronavirus restrictions, though it added that there has been a recovery in the price of vanadium to US$7 per pound from US$5.30/lb.
The company’s long term forecast is for around US$7.50/lb, close to today’s level, which it said is a little lower than external forecasters and other vanadium project companies are using.
However, the AIM=listed group said the drop in vanadium prices has reduced cash flow and it is in discussions about raising additional capital.
“Both the current market price and our long-term estimate provide an exceptionally high margin to the company’s forecast cash cost of production of US$1.54/ib, contained in the Competent Person’s Report on our Balasausqandiq project by GBM.
“The roll-out of vanadium redox flow batteries for renewable energy storage, which was stalled by the exceptionally high vanadium price in 2018 and 2019, is now expected to resume and grow to be a very significant additional market for vanadium,” the company concluded in its statement