At time of writing, shares of Venus Metals Corporation Ltd [ASX:VMC] are up by 25.81%, to 19.5 cents per share.
Why did Venus Metals Corporation share price do this?
Venus Metals Corporation announced a major breakthrough for its Youanmi Vanadium project. Metallurgical test work confirmed strong recovery into solution of V2O5 (battery-grade vanadium) by simple atmospheric sulphuric acid leach testing of oxide vanadium ores. The technique was parred with co-extraction of nickel, copper and cobalt, which could enhance the project economics.
What now for Venus Metals Corporation?
The test results suggests that bulk mining and acid leach processing is an attractive development pathway for initial scoping study work. A 6,000 metre drill program will kick-off soon. The program’s aim is to confirm the metallurgical testing results and provide a large measured resource for the Youanmi Vanadium project.
Vanadium batteries offer multiple benefits in the ‘base-load’ energy storage space, which make them attractive compared to coal and nuclear energy.
Unfortunately, the majority of vanadium is too expensive to extract from the ground using modern-day technology. That will likely change one day. But unlike lithium companies, which offer a reasonable timeline to profitability today, vanadium companies don’t offer near-term production potential.
It costs billions to get the product out of the ground.
That said, Venus Metals Corporation could offer a quicker and cheaper pathway to production. A recent geological review identified a widespread and remarkably even distribution of high vanadium values from surface down to 50 metres below the ground.
That’s pretty shallow.
The bottom line: Youanmi Vanadium seems appealing for shareholders. But it’s still early days. The company needs to confirm the metallurgical results following the next phase of drilling, upgrade the resource and demonstrate that the project economics are attractive. In that case, while the share price could move higher, we’re optimistically cautious at this stage.
Resources Analyst, For Markets & Money
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