Further to the Company’s announcement on 16 March 2022¹, Australian Vanadium Limited (ASX: AVL, “the Company” or “AVL”) is pleased to advise that AVL and the Commonwealth of Australia, represented by the Department of Industry, Science and Resources, have executed a Commonwealth Grant Agreement (“the Agreement”) as part of the Modern Manufacturing Initiative - Manufacturing Collaboration Stream (“the Grant”).

KEY POINTS

• AVL and the Commonwealth have executed a grant agreement under the Modern Manufacturing Initiative – Manufacturing Collaboration Stream.¹
• The Agreement provides a grant of $49 million to support the Australian Vanadium Project.
• The Australian Vanadium Project is one of the most advanced critical mineral vanadium projects being developed globally, with the potential to produce 11.2kt per annum of vanadium pentoxide over a 25+ year mine life.²

The Grant provides up to $49 million in funding support for the Australian Vanadium Project (“the Project”) to assist the Company, in collaboration with industry partners, to create an Australian vanadium battery industry. The Grant funds eligible activities to construct and commission a concentrator and high-purity vanadium processing facility capable of using green hydrogen as part of the extraction process for the Project. This critical mineral extraction process is a key precursor for vanadium electrolyte manufacturing. The scope of the Grant encompasses support for all stages of the vanadium production value chain, from mining and concentrating to vanadium processing for use in electrolyte production, a key enabler for the Australian vanadium redox flow battery industry. As part of the activities under the Grant, AVL will also collaborate with Bryah Resources Limited (ASX: BYH) to explore options to extract cobalt, nickel, copper and gold economically from the Project.³ Broader activities needed to realise the overall Project, such as development of the mine and supporting infrastructure, will be funded from sources other than the Grant.

CEO, Graham Arvidson comments, “AVL has been working closely with the Australian Government and we are pleased to announce execution of the Agreement. The Grant will be of great benefit to AVL as we seek to optimise and finalise our financing and offtake arrangements and continue to move the Project forward for the benefit of the mid-west region of Western Australia, and Australia more broadly. We are very grateful to the Australian Government and the grant team who worked tirelessly to finalise this important outcome.”

The Agreement has a commencement date of 29 May 2023 and ends on 31 July 2026.

The Grant will be be paid progressively over the term of the Agreement, subject to milestones and compliance by the Company with its obligations under the Agreement. An initial payment of $9.8 million is scheduled to be received by the Company in June 2023, followed by three further payments, with the final payment scheduled for August 2025.

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