Australia-based Mustang Resources has released an update for its Caula vanadium-graphite project in Mozambique.
The now completed Joint Ore Reserves Committee-compliant estimate pegs the total vanadium at 22 million tonnes (Mt) with 0.37 percent vanadium pentoxide (V205), which translates to a total of 81,600 tonnes of contained vanadium pentoxide.
While the focus of the Caula site is graphite production, the positive vanadium results will represent a favorable financial boost for the company, as vanadium demand and prices are high.
“With vanadium pentoxide prices running at more than US$40,000 per tonne (98 percent V2O5), the Caula resource translates to a highly valuable resource,” Dr. Bernard Olivier, Mustang’s managing director, said in a press release.
Chinese demand for vanadium grew by 15 percent month-to-month in May, as steel mills across China prepared to make steel with a higher strength. Vanadium is a critical alloy when making stronger steel.
The industrial metal is also playing an important role in the battery sector. According to Mustang, 3,000 tonnes of vanadium were used in batteries in 2017, double the amount used in 2016.
The vanadium resource at Caula is subdivided into two zones: the oxidized zone, representing 8.9 Mt at 0.31 percent V2O5 for 27,400 tonnes contained V2O5; and the fresh zone with 13.1 Mt at 0.41 percent V205 for 54,200 tonnes of contained V2O5.
As previously mentioned, the company has been working to bring graphite production into fruition at the site. The graphite resource at Caula is 5 Mt at 13 percent total graphitic carbon. Mustang is currently finalizing an updated graphite mineral resource estimate, with plans to start production in early 2019.
“The potential of the project is even greater as our vanadium is mica-hosted and associated with the graphite mineralization and potentially far cheaper to extract and recover through two simple processing steps, compared with most vanadium projects, where the vanadium is located in a complex titaniferous magnetite ore body,” added Olivier.
Last week, Mustang announced the merger of its ruby interests with Toronto-listed Fura Gems (TSXV:FURA). The move will allow Mustang to focus its attention and resources on developing the Caula project.
Moving forward, Mustang believes there is potential to grow the vanadium resource through exploration.
Mustang shares remained flat on Monday (July 23), closing at AU$0.19.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.