The timing of the announcement coincides with an uptick in the price of vanadium. Since January 2017, the price of the silvery-gray metal has increased more than 320 percent, with current V205 prices sitting at US$17 per pound.
CellCube Energy Storage Systems (CSE:CUBE,OTCMKTS:CECBF) has announced the formation of a publicly listed subsidiary called Vanadium 23.
The newly formed subsidiary will consist of the company’s wholly owned Nevada-based vanadium project, which is made up of the Bisoni Mackay and the Bisoni-Rio areas.
The timing of the announcement coincides with an uptick in the price of vanadium. Since January 2017, the price of the silvery-gray metal has increased more than 320 percent, with current vanadium pentoxide (V205) prices sitting at US$17 per pound.
“The new CellCube management team quickly identified the opportunity to create a stand-alone vanadium company with size and scale that will solely focus on developing its current vanadium properties into reserves, and ultimately, product for the battery storage and technology industries,” Mike Neylan, CEO of CellCube, said in a press release.
Vanadium has become increasingly popular in recent years. It is widely used as an alloy to strengthen steel and is a key component in vanadium-flow batteries, which are used in the energy storage industry.
“Specialized purified vanadium has been one of the best performing commodities over the past two years and demand is only growing while supply is quite restricted due to the requirement of obtaining high purity vanadium for end users,” noted Neylan.
CellCube’s project is considered one of the largest pure-play vanadium assets in North America, covering a total of 4,115 acres contiguous to Prophecy Development’s (TSX:PCY) Gibellini deposit.
Although only 12 percent of the Bisoni McKay area has been drilled, and none of the Bisoni-Rio region, the project has an indicated resource of 11.9 million tons at an average grade of 0.39 percent V2O5, and an inferred resource of 7 million tonnes at an average grade of 0.42 percent V2O5.
According to the company, the indicated resource is contained in a zone approximately 300 meters in strike length, while the inferred resource covers about an additional 200 meters of strike length extending to the south.
Once the spin out has been completed, CellCube intends to issue one share of Vanadium 23 for every two shares of CellCube held by CellCube shareholders of record. The company itself plans on retaining a 19.9-percent interest in Vanadium 23.
Neylan added, “[i]n addition, the intended spin out will allow CellCube and its management team to firmly focus on its energy storage solutions while ensuring a vertically integrated supply chain of high purity vanadium.”
CellCube’s share price was down 1.79 percent Thursday (June 28) and sat at C$0.275 at midday.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.