Prophecy Development released the results of a positive preliminary economic assessment study for its Gibellini vanadium project. The PEA reported an after-tax cumulative cash flow of US$601.5 million, an internal rate of return of 50.8 percent.
Prophecy Development (TSX:PCY,OTCQX:PRPCF,FWB:1P2N) has released the results of a positive preliminary economic assessment study for its Gibellini vanadium project, designed to be an open pit heap leach operation in Nevada’s Battle Mountain region, about 25 miles south of the town of Eureka.
The PEA reported an after-tax cumulative cash flow of US$601.5 million, an internal rate of return of 50.8 percent, a net present value of US$338.3 million at a 7 percent discount rate and a 1.72 years payback on investment from start-up assuming an average vanadium pentoxide price (V2O5) of US$12.73 per pound.
As quoted from the press release:
“The PEA was prepared on schedule and on budget. This comprehensive 249-page PEA presents exceptional project economics and positions Gibellini as the most important vanadium mineral deposit in North America in terms of project viability and time to market,” said John Lee, Prophecy’s executive chairman.
Gibellini’s annual vanadium production would represent roughly 3.5 percent of global vanadium production today. That share increases to 15 percent if one excludes vanadium production from China, Russia and South Africa. The timeline from receipt of permit and capital to build a new vanadium mine and mill, and first production, has historically been five years according to leading vanadium industry consultants, TTP Squared Inc. They also state that it is improbable that any potential new vanadium mines will add any significant amount of production to the supply base in the next few years.
Gibellini offers phenomenal leverage to rising vanadium prices in a politically-safe, mining-friendly jurisdiction. Every dollar (per pound) increase in vanadium pentoxide price lifts our project NPV by over US$60 million. Prophecy has a total of approximately 7.5 million shares outstanding.