Syrah Resources testwork produces world leading vanadium concentrate from Balama
Syrah Resources’ (ASX: SYR) initial testwork on vanadium ore from its Balama project in Mozambique has produced a world leading concentrate with 5.02% V2O5.
Balama has a current Inferred Vanadium Resource of 1.15 billion tonnes at 0.23% V2O5 for 2,650,000 tonnes of contained V2O5 is about four times larger than the Glencore’s operating Rhovan deposit in South Africa.
This is further supported by the Balama’s high grade Mualia Zone, which has a Resource of 136 million tonnes at 0.43% V2O5, rivalling Rhovan in both size and grade.
Mualia is also open down dip and along strike, raising the potential for its contained resource to exceed that at Rhovan.
Further work is being conducted to increase the concentrate grade through optimisation of the flowsheet as well as prove up much higher vanadium grade zones based on the presence of a very high abundance of green minerals in the Sushi Zone (Balama East).
Work has also shown that contrary to its previous belief that Balama vanadium is locked up in micaceous minerals such as roscoelite, it is also hosted in several other magnetic materials such as ferro-vanadium magnetite, limonite and goethite.
About 75% of the vanadium is hosted in the above weakly magnetic minerals. The remaining 25% of the vanadium is hosted in non-magnetic minerals such as kaolinite, silicates and mica/muscovite.
This opens up the potential for the company to sell into the magnetic and non-magnetic vanadium market segments.
A bulk sample of Balama ore from the Balama West Mualia Zone grading 0.46% V2O5 was sent to a specialist laboratory for vanadium testwork.
This resulted in the recovery of the 5.02% V2O5 concentrate through magnetic separation which used a combination of magnetic force, fluid and gravity to process magnetic minerals.
The same process will be used to produce a cleaner graphite concentrate by extracting the magnetic vanadium minerals.
Syrah noted the remaining 25% of the non-magnetic vanadium bearing minerals that report to the tails will now be tested to determine if they can be separated using standard flotation processes. It expects this to further upgrade the already high vanadium concentrate grade.
Producing both a magnetic and non-magnetic concentrate will allow the company to tap two major vanadium market segments.
Ferro-vanadium derived from magnetic sources is used as a hardening additive in the steel industry. Non-magnetic vanadium is used in specialty applications such as vanadium redox batteries and in the ceramic, glassware and specialty chemical industries.
Further work is still to be completed on extracting high purity vanadium pentoxide via hydrometallurgical process from the vanadium concentrates.
Comparison with other vanadium projects
Syrah noted the highest grade vanadium deposit in the world is said to be Largo Resources’ (CVE: LGO) Maracas project in Brazil, which has a Reserve of 17.2Mt at 1.44% V2O5 and is scheduled to come into production later this year with Glencore taking 100% of production for the initial six years.
However, while it contains a higher grade ore to Balama, Largo has reported that the average concentrate grade is 3.5% V2O5, which is said to be the highest grade vanadium concentrate in the world.
In contrast, while Balama has an Inferred Resource of 1.15 billion tonnes at 0.23% V2O5, it includes the Mepiche (145 million tonnes at 0.43% V2O5), Mualia (136 million tonnes at 0.43% V2O5) and Ativa (21 million tonnes at 0.38% V2O5) high grade zones.
More importantly, Balama’s vanadium ore can currently be upgraded to a concentrate grade above 5%.
Graph showing ore and concentrate grade from various vanadium mines
In addition, while Maracas has a strip ratio of 6.27:1 with Largo estimating operating expenditure at US$61.50 per tonne or ore, Balama outcrops at surface and is expected to have a negligible strip ratio, which could result in substantially lower costs.
Potential for higher vanadium ore grades
As noted in Syrah’s June 2013 quarterly report, spectacular zones of vanadium bearing graphite mineralisation were recently identified at surface at the Sushi Zone at Balama East.
This is based on the presence of a very high abundance of green minerals which are typically vanadium rich based on previous mineralogical studies of Balama rock samples undertaken by the company.
Rock samples from Sushi have been taken for assaying and drilling will take place later in the current field season.
The company believes that there is significant scope to prove up higher grade vanadium zones than currently reported.
While Balama is perhaps more well known for its graphite resources, which exceeds resources in the rest of the world, the high grade vanadium concentrate produced by testwork has highlighted another source of cashflow for Syrah Resources.
Proactive Investors continues to consider the company to be significantly undervalued at a share price of $2.03 and we believe there is considerable scope for the company’s share price to appreciate to the $2.40-$2.50 range.
Significant milestones include further upgrades to the V2O5 concentrate from ongoing testwork and proving up higher grade vanadium zones at the Sushi Zone.
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