Battery Metals

Strategic Resources Announces Mustavaara PEA; Euro190M After-tax NPV with a 20 Year Mine Life

Strategic Resources Inc. (TSXV: SR) (the "Company" or "Strategic") is pleased to announce it has received positive results from the Preliminary Economic Assessment (the "PEA"), prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), for its 100%-owned Mustavaara Project ("Mustavaara" or the "Project"). The PEA outlines a long-life economic project in current market conditions.

Strategic Resources Inc. logo (CNW Group/Strategic Resources Inc.)

Scott Hicks , CEO and Director, commented: "I am extremely pleased that we have demonstrated the ability for this brownfield project to come back into production in the future. Management will now turn its focus to engaging with Finnish authorities on the existing permits held by the previous owner that require transferring and extension, key environmental monitoring work and evaluating moving to a pre-feasibility study."

Preliminary Economic Assessment Summary

The PEA, initiated in late 2020, was produced by a team of independent consultants that possess extensive expertise in their respective fields. Further details on the contributors can be found in the Qualified Persons section of this news release.

All amounts are in Euros unless otherwise specified. Base case economics were calculated using a ferrovanadium ("FeV80") price of US$32.00 per kilogram and pig iron price of US$450 per tonne. An exchange rate of EUR:USD of 1.18 was used. The effective date of the PEA is May 4, 2021 and a technical report relating to the PEA will be filed on SEDAR within 45 days of this news release.

The PEA's highlights include the following estimates:

  • Life of mine ("LOM") average annual production of 4.6 kt of FeV80
  • LOM average annual co-product production of 329 kt of pig iron
  • 20.25-year mine life
  • 10,400 tpd processing operation over the life of mine
  • After-tax NPV (8%) and IRR of €190 million and 12.2%
  • Average all-in sustaining co-product cash costs of €15.2 /kg FeV80 and €210.7/t pig iron
  • LOM revenue mix of 46.7 % FeV80, 50.8 % pig iron and 2.6 % other by-products
  • Initial capital costs of €597 million
  • Life of mine sustaining capital and closure costs of €94 million

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the PEA will be realized.

Next Steps and Recommendations

The PEA report recommends advancing to a pre-feasibility study on the Project, which would require approximately €1.4M euros and include additional hydrological, comminution, metallurgical and engineering work. Prior to commencing such work, Strategic will engage with local authorities on the existing permits held by the previous owner and assess key environmental monitoring programs.

Table 1: Summary of Mustavaara Economic Results by FeV80 and Pig Iron Price

Percentage of Base Case Prices




FeV80 (US$ per kg)




Pig Iron (US$ per tonne)




Pre-Tax NPV (8%) (€M)

€ (88)



Pre-Tax IRR




Post-Tax NPV (8%) (€M)

€ (115)



Post-Tax IRR




Table 2: Mustavaara Life of Mine Capital Expenditure Estimate Breakdown

Initial Capital (€M)

Mine and Beneficiation Plant


Infrastructure and Utilities


Smelting Plant


Indirect Costs


Sub Total


Contingency (10%) (1)


Total Initial Capital


Sustaining Capital and Closure Costs (€M)

Life of Mine Sustaining Capital


Average Annual Life of Mine Sustaining Capital


Closure Costs (2)



Totals may not add up due to rounding.


The contingency allowance was added as a flat percentage on top of base cost. Percentage is based on assessed uncertainty in the cost areas.


A closure deposit (including VAT) of 1M is paid annually to the Finnish government. After closure is completed the deposit is refunded.

Table 3: Summary of Mustavaara Operating Cost Estimates and Cash Costs

Average Operating Costs

Years 1-20

Mining Costs per Tonne Material Moved

2.2 €/t

Mining Costs per Tonne of Processed Material

6.0 €/t

Costs Per Concentrate Tonne to Smelter

87.7 €/t

Mining Costs

37.9 €/t

Beneficiation Costs

24.2 €/t

Logistics & Admin Costs

25.5 €/t

Smelting Cost Per Tonne Concentrate

190.6 €/t

Average Cash Costs [Per unit of production, not nominal]

Years 1-20

Co-product Cash Cost FeV80 (€/kg)

14.6 €/kg

Operating Costs

15.3 €/kg

0.15% Extraction Royalty

0.006 €/kg

By-product Credits

-0.7 €/kg

Co-product Cash Cost Pig Iron (€/t)

203.6 €/t

Operating Costs

213.3 €/t

0.15% Extraction Royalty

0.09 €/t

By-product Credits

-9.8 €/t

All-in Sustaining Cash Cost FeV80 (€/kg)

15.2 €/kg

Co-Product Cash Costs

14.6 €/kg

Sustaining Capex Cost

0.4 €/kg

Closure Cost

0.1 €/kg

All-in Sustaining Cash Cost Pig Iron (€/t)

210.7 €/t

Co-Product Cash Costs

203.6 €/t

Sustaining Capex Cost

5.3 €/t

Closure Cost

1.7 €/t

Note: Totals may not add up due to rounding. Operating costs, royalties, and by-product allocation 50%/50% to FeV80 and Pig Iron products.
Cash Cost: (Operating costs including transportation and refining costs + Royalties – By-product credits) / Payable Product.
All-in Sustaining Cash Cost: Adds sustaining capital and closure costs to the Co-product Cash Costs.

Table 4: Estimate of Mineral Resource – Mustavaara Deposit (11.0% Magnetite Cut-off Grade)

Resource Class

Million Tonnes

Average Grade

Contained Metal


VinMC (8)


Ti (9)


Fe (9)


VinMC (8)


Ti (9)


Fe (9)




















Total M&I


















Note: Totals may not add up due to rounding.

The NI 43-101 mineral resource estimate summary above is calculated using the base case cut-off grade of 11.0 percent magnetite. The estimate is based on a total of 9,911 metres of diamond drilling in 73 holes. None of these holes were drilled by Strategic, but historic core, rejects and pulps have been reanalyzed and the historic database has been validated. The mineral resources are estimated using a three-dimensional block model with a nominal block size of 20 X 20 X 12.5 metres. Grade estimates for magnetite, vanadium, titanium and iron are based on geology, drill hole spacing and geostatistical analysis of drill hole sample data. The grade models have been validated using a combination of visual and statistical methods. Blocks in the model are estimated using five or more composite drill hole samples within a maximum average distance of 50m , 100m and 200m for the measured, indicated and inferred mineral resource categories respectively.

Mineral Resource Notes and Assumptions

(1) The mineral resource estimate has an effective date of September 14, 2020 . (2) Mineral resources do not have demonstrated economic viability. (3) The mineral resources in this estimate were calculated with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions. (4) Metal prices used: Pig Iron, US$350.00 per tonne and Ferrovanadium, US$30.00 per kilogram. (5) Base case cut-off grade for the estimate of the mineral resources is 11.0% magnetite. (6) It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated or measured mineral resources with continued exploration. (7) Strategic is not aware of any legal, political, environmental, or other risks that could materially affect the potential development of the mineral resources. (8) A 30-gram charge of agitated sample pulp "suspended" in water is separated magnetically as it passes through a rotating, inclined glass tube. The applied magnetic field causes magnetic minerals to stick to the tube walls. The weight percent of vanadium retained in the magnetic fraction is reported as VinMC (Vanadium in Magnetic Concentrate) and can be correlated with magnetically recovered vanadium grades in large scale magnetic separation plants. This work has indicated that the magnetite content could be upgraded by a factor of six. (9) Ti (titanium) and Fe (iron) grades and contained metal values are stated in recovered magnetite concentrate post upgrading.

Mining and Processing Facility

The PEA contemplates large-scale open pit mining using a 100% owner operated equipment fleet. Mine production and mill feed schedules were estimated from the phase resource tabulations using a declining cut-off grade strategy to maximize net present value for a processing rate of 10.4 ktpd. Pit limiting floating cone shells used to develop the mine plan were based on US$25.50 /kg FeV80 price and US$340 /t pig iron prices.

The ferrovanadium production process consists of a concentrator plant at the Mustavaara site and smelter / hydrometallurgical plants in Raahe. The concentrator plant process is based on crushing, two-stage grinding and multi-stage magnetic separation to produce iron/vanadium concentrate. The concentrate would then be transported approximately 250 km to Raahe using trucks.

Direct smelting and selective oxidation are used to bring vanadium to a suitable form (vanadium slag) to act as a feed material to the roast-leach process. Pig iron is produced as a co-product of the smelting process. A roast-leach process is used to produce vanadium pentoxide (V2O5) from vanadium slag. Vanadium pentoxide is then fed into an aluminothermic reduction to produce the final product, ferrovanadium (FeV80). Possible by-products include sodium sulphate, TiO2 slag and Ca-Al Slag.

Table 5: Mined and Processed Material Summary

Grade in Concentrate (%)

Contained Metal in Concentrate

Material Type









Total Processed






Waste Material


Total Mined


Strip Ratio


Table 6: Processing Schedule

Years 1-10

Years 11-20

Years 1-20

Avg. Processed Tonnes (Mt/a)




Avg. Vanadium Grade in Con. (%)




Avg. Fe Grade in Con. (%)




Table 7: Metallurgical Recoveries Summary

Process Recoveries

Recovery of Magnetite to Concentrate


Vanadium Recovery from Concentrate to V2O5


Vanadium Recovery from Concentrate to FeV80


Iron recovery from Concentrate to Pig Iron


Tailings and Waste Rock Storage Facilities

The planned waste rock storage facility is located to the east of the open pit, partly at the north-east slope of the Mustavaara hill. The area was partly used for waste rock deposition during the previous mining operation. Due to the historic mining at Mustavaara, there is an existing tailings storage facility. The new deposition is planned on top of the existing deposition area.

Power Infrastructure and Water Requirements at the Mine Site

The total installed power of the concentration process main equipment has been estimated at 11.5 MW and total peak power including all processes is estimated at 18 MVA for 505,000 t/a concentrate production. The required electric power will be provided through connection to the local 110 kV power grid. The new 110 kV power line covers a distance of approximately 32 km and will be built to connect the mine site to an existing switchyard at the Posio municipality area. The power line route will follow the same path that was used during the former mining operations at Mustavaara. Water for processing would come from a raw water basin and from the Sirniönlampi lake.

Raahe Smelter Site

The proposed Raahe smelter site would be located at the Port of Raahe next to the SSAB steel plant. Both the regional and detailed land use planning processes for the smelter were completed in 2017. The surrounding infrastructure includes a harbor, railway line and the 110kV national grid. The area has a long history of steelmaking, which has created an extensive network of industrial services to Raahe.

Employment and Corporate Social Responsibility

During the construction period, 150-200 full-time employees are anticipated to be hired, which does not include outside contractors. The onsite construction workforce is estimated to vary during the construction period between 500 and 700 depending on the specific work being performed at the time. Over the 20-year mine life it is expected that the Project will employ 200 to 300 people.

Strategic is committed to earning and maintaining a robust social license to continue its Mustavaara mineral exploration and mine development operations in Finland . The Project has been designed to meet Finnish environmental regulations, international mining industry best management practices and appropriate international lending institution guidelines. As such, significant human and financial resources have been factored into the PEA to meet environmental obligations and social commitments.

Taxes Applied in the Economic Model

The PEA incorporates a 0.15% extraction royalty, a 20% Corporate Tax and several other local and municipal taxes. The total life of mine payments resulting from the royalty and taxes are €298M under the assumed commodity prices.

Qualified Persons

The scientific and technical information contained in this news release pertaining to the Project has been reviewed, verified and approved by the following Qualified Persons as defined by NI 43-101: Ville-Matti Seppä, EurGeol, (Mineral resources, process and Economic analysis) of AFRY Finland Oy, Eemeli Rantala , P.Geo (Environment) of AFRY Sweden Ab and Pekka Lovén, MAusIMM (Mine design) of PL Mineral Resources Services. All the Qualified Persons are independent of Strategic Resources Inc.

About Strategic Resources

Strategic Resources Inc. (TSXV:SR) is a Vancouver, Canada based mineral exploration and development company that is focused on vanadium projects in Finland and Peru . The Company is primarily focused on its flagship Mustavaara vanadium-iron-titanium project in Finland . The Company continues to evaluate new opportunities that are related to the electrification of the economy.

Further details are available on the Company's website at .

To follow future news releases, please sign up at .


Signed: "Scott Hicks"

Scott Hicks , CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Note Regarding Forward-Looking Information

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to the mined and processed material estimates for the Project; the internal rate of return of the Project; the annual production of the Project; the net present value of the Project; the life of mine of the Project; the capital costs, operating costs and other costs and payments estimated for the Project and the proposed infrastructure for the Project (including how, when, where and by whom such infrastructure will be constructed or developed); projected metallurgical recoveries; the proposed level of employment at the Project; whether the Company will move the Project to a Pre-Feasibility stage; that the majority of inferred mineral resources could be upgraded to indicated or measured mineral resources with continued exploration; that the vanadium-iron concentrate that makes up the majority of the Project revenue will be trucked to Raahe and be processed into ferrovanadium and pig iron. Often, but not always, forward-looking statements or information can be identified by the use of words such as "will" or "projected" or variations of those words or statements that certain actions, events or results "will", "could", "are proposed to", "are planned to", "are expected to" or "are anticipated to" be taken, occur or be achieved.

With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions including among other things, assumptions about general business and economic conditions, the prices of vanadium and pig iron, and anticipated costs and expenditures. The foregoing list of assumptions is not exhaustive.

Although management of the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks associated with the business of the Company; business and economic conditions in the mining industry generally; the supply and demand for labour and other project inputs; changes in commodity prices; changes in interest and currency exchange rates; risks relating to inaccurate geological and engineering assumptions (including with respect to the tonnage, grade and recoverability of reserves and resources); risks relating to unanticipated operational difficulties (including failure of equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters); risks relating to adverse weather conditions; political risk and social unrest; changes in general economic conditions or conditions in the financial markets; and other risk factors as detailed from time to time in the Company's continuous disclosure documents filed with Canadian securities administrators. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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Argus Research Initiates Equity Research Report Coverage on Largo Inc.

Argus Research, an independent investment research firm, has launched Equity Research Report coverage on Largo Inc. (NasdaqGS: LGO, TSX: LGO).

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Click Here to view full Argus Equity Research Report .

COMPANY HIGHLIGHTS: Excerpts (as conveyed by Argus Analyst Steve Silver ) include:

LGO: Serving Global Vanadium and Renewable Energy Markets

  • Largo is among the lowest cost producers of naturally occurring element Vanadium, a key input in steel construction and used in industries including aerospace, chemicals and renewable energy. We expect vanadium demand to exceed supply for the foreseeable future, which should support sustained higher prices above the commodity's historical average, with premium, high purity products used in non-steel markets expected to support robust cash flow and profitability for the company.
  • In our view, the company's Maracás Menchen Mine in Brazil is poised to improve yield and efficiency in the coming years, as Largo moves past operational challenges that dampened 2022 results, including a change in mining contractors and higher than average rainfall that resulted in atypical operational downtime. We are encouraged by Largo's decision to advance several planned maintenance projects, including the upgrading of its pumping system, that were performed during the down period.
  • Beginning in 2024, we expect results to benefit from the production of ilmenite, which is a by-product of its existing vanadium production, and should incur modest incremental production costs. We expect the ilmenite plant to be commissioned around the middle of 2023. We also see potential for Largo to produce another by-product, titanium, though this project has been delayed, as Largo works to finance it. Still, we favorably view a late 2021 technical report on the site that suggested more than 20 years of remaining mine life for the Brazil operation, including these additional revenue sources, with a projected NPV of more than $2 billion that compares favorably to the current market capitalization of approximately $310 million .
  • We also view positively Largo's foresight to diversify its business to capitalize on long-term growth trends. In 2020, the company acquired 12 patent assets that provided entry into the nascent long duration vanadium battery (VRFB) storage market, which we see benefiting from global economic shifts towards a lower carbon footprint. Largo Clean Energy's VCHARGE VRFBs offer an efficient, safe system that is fully recyclable at the end of its expected 25+ year lifetime. Over time, we expect Largo Physical Vanadium, a partially owned but separately listed entity on the TSX Venture Exchange that will own the vanadium element to be used in these battery projects, to lower the upfront capex of that battery system by 40%-50%.
  • Although we see Largo's diversification into the renewable energy space requiring capital investment and adding an element of risk to Largo's investment thesis, we view the outlook for sustained long-term demand for vanadium and pricing strength in a more normalized, post-COVID-19 world as not fully valued by investors.
  • As of December 31, 2022 , Largo had $54.5 million in cash, and $115.2 million in working capital. The company has entered into new debt agreements totaling $40 million , which we anticipate will enable it to weather near-term operational challenges and internally fund projects including the ilmenite production plant that we expect to begin contributing to revenues and EBITDA by 2024.
  • Largo's stock declined 42% in 2022, and we think its current valuation does not adequately reflect the company's strong underlying fundamentals. Based on our EV/NPV analysis, we arrive at a fair value estimate of $9 , well above its current price near $5 .

INVESTMENT THESIS: Click Here to view full Argus Equity Research Report and Investment Thesis.

About Largo Inc. (NasdaqGS: LGO, TSX: LGO)

Based in Toronto, Ontario , Largo is a dual-listed mining and battery energy storage system company that we view as among the world's leading high-quality and low-cost vanadium suppliers, sourced from its Maracás Menchen Mine in Brazil . Recently, the Company established a U.S.-based clean energy unit that develops and sells vanadium-based electrical energy storage battery systems to support the global deployment of long duration, renewable energy solutions. Largo has also established a separate public entity, Largo Physical Vanadium, that is designed to lower the costs of Largo's battery customers, while also giving investors direct exposure to vanadium, which never existed before.

For more information please contact:

Alex Guthrie
Senior Manager, External Results

About Argus Research Corp.

Headquartered in NYC, Argus Research ( ) is a leading independent equity research firm (est. 1934)  ̶  providing fundamental and quantitative research coverage on more than 1,600 companies across all 11 sectors of the S&P 500, as well as macroeconomic and equity market forecasts, thematic research, model portfolios and IPO research.  In addition, Argus has recently committed to providing a sponsored research solution for small & mid-cap companies seeking coverage.  Argus's Equity Research & earnings estimates are available on major research / earnings estimate aggregator platforms, including Bloomberg, Thomson Reuters, Factset and S&P Global.

For more Information please contact:

Darrell Stone

Argus Research Co. has received a flat fee from the company discussed in this report as part of a Sponsored Research agreement between Argus and the company. No part of Argus Research's compensation is directly or indirectly related to the content of this assessment or to other opinions expressed in this report. Please refer to the full Argus report and the disclaimer for complete disclosures.

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