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Vanadium Project Summary

Gabanintha Vanadium Project – Western Australia

The Gabanintha Vanadium Project consists of the Gabanintha high-grade V-Ti-Fe deposit located in the Murchison Province approximately 43kms south of the mining town of Meekatharra in Western Australia. The project consists of eight granted exploration licenses and one exploration license application in the Gabanintha Formation in the north of the Murchison granite-greenstone terrane of the Archaean Yilgarn Craton.

AVL has agreed to sell the precious and base metal rights on the Gabanintha Project to Bryah Resources Ltd with AVL retaining rights to the vanadium and other battery metals (titanium, chromium, uranium, lithium, tantalum, iron ore and manganese) and retain primary title over the licenses. The development by AVL of the world class high grade Vanadium-Titanium-Iron Project at Gabanintha will continue unabated.

 

Gabanintha Vanadium Project_Figure1
Mineralisation is hosted by an anorthositic gabbro intrusion striking north-northwest and dipping steep to moderately to the west. The intrusion has a talc-carbonate ultramafic footwall and both the intrusion and mineralisation are disrupted by later dolerites and granites and a series of east and east southeast trending faults.
 Gabanintha Vanadium Project_figure2_schematic_geological 

Mineralisation is closely associated with a series of titaniferous magnetite bands ranging in size from a few metres to 30m thick. There are two distinct zones of mineralisation a basal, massive, high grade band and an upper disseminated band with lower grade.

The deposit is over 12km along strike, outcrops at surface and is largely continuous. Over 13,000m of drilling has been conducted on the deposit comprising 155 reverse circulation (RC) holes and nine diamond (DD) holes. These holes have been geologically logged and sampled and were used to determine a JORC 2004 Compliant Mineral Resource Estimate in 2011.

Gabanintha Vanadium Deposit – Mineral Resource Estimate
Material JORC Resource Class Million tonnes In Situ Bulk Density V205% Fe% Ti02% SI02% AL203% L0I%
High Grade Indicated 14.4 4.17 1.03 42.14 12.07 11.42 7.84 3.37
Inferred 46.0 4.16 0.97 42.15 11.19 12.37 8.28 3.20
Sub-total 60.4 4.16 0.98 42.15 11.40 12.15 8.17 3.24
Low Grade Indicated 42.7 2.71 0.44 23.37 6.08 29.25 18.09 8.94
Inferred 22.7 2.67 0.42 22.65 6.08 30.62 16.96 6.92
Sub-total 65.4 2.70 0.43 23.12 6.08 29.73 17.70 8.24
Total Indicated 57.0 2.97 0.59 28.10 7.59 24.76 15.51 7.54
Inferred 68.8 3.51 0.79 35.70 9.50 18.40 11.15 4.43
Total 125.8 3.25 0.70 32.26 8.64 21.29 13.13 5.84

Note: In-situ dry bulk density has been assigned based on V2O5 grade, therefore density values quoted here are weighted average values. The Mineral Resource was estimated as a block model within constraining wireframes based upon logged geological boundaries and grade cut-offs of 0.30% V2O5 for Low Grade (LG) and 0.70% V2O5 for High Grade (HG). Tonnages have been rounded to reflect that this is an estimate.

Gabanintha Vanadium Project_figure3

Extensive historic and modern mining has occurred immediately adjacent and within the Gabanintha Project area and stakeholders are supportive of ongoing mining and exploration activity. The Company does not expect any significant environmental impediments to future mining and exploration activity will be identified.

Engineering scoping studies into the development of a vanadium mine at Gabanintha conducted in 2009 demonstrated that an operation to mine and beneficiate ore to produce ferro-vanadium is technically and commercially viable.

Recent developments in vanadium redox battery technology for grid-scale energy storage with improved vanadium demand fundamentals have underpinned the technical assessment into production options including high purity vanadium pentoxide and by-products. The Company is focused on definition of the most economical start-up mining and product combination that minimises capital expense and maximises value.

Initial metallurgical results have been highly encouraging and this is an area of current focus within an updated scoping study. Modified Davis Tube testwork (samples crushed to 500 micron), demonstrated significant increases in grades of vanadium for massive mineralisation types (fresh and transitional) and disseminated mineralisation (fresh). Oxide, transitional and fresh ore types behave differently and further metallurgical testing is required to develop optimised beneficiation parameters.

Davis Tube Tests
Sample details Fraction Wt. Dist’n V205 V205 Fe Fe SiO2 SiO2 TiO2 TiO2
Grade Distrib Grade Distrib Grade Distrib Grade Distrib
% % % % % % % % %
GRC 53 HG Fresh Massive Calc Feed 100 1.27 100 54.8 100 2.04 100 13.2 100
Conc 90.8 1.37 97.6 58.0 96.1 0.58 25.8 12.3 84.7
Tail 9.2 0.33 2.4 23.0 3.9 16.4 74.2 21.8 15.3
GRC 53 Fresh LG Dissem HW Calc Feed 100 0.58 100 29.3 100 23.8 100 7.7 100
Conc 22.4 1.59 61.3 57.8 44.2 1.64 1.5 10.30 30.0
Tail 77.6 0.22 38.7 21.1 55.8 30.2 98.5 6.9 70.0
GRG 54C High Fe Scree Calc Feed 100 0.89 100 46.4 100 11.0 100 9.04 100
Conc 13.5 1.04 15.8 56.0 16.3 3.45 4.2 8.12 12.2
Tail 86.5 0.87 84.2 44.9 83.7 12.2 95.8 9.2 87.8
GRG 63 Transition Massive Calc Feed 100 1.17 100 51.0 100 4.22 100 12.5 100
Conc 35.9 1.34 41.2 56.3 39.6 0.87 7.4 12.1 34.8
Tail 64.1 1.07 58.8 48.0 60.4 6.10 92.6 12.7 65.2
Competent Persons Statement

The information in this statement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by independent consulting geologist Brian Davis B.Sc (Hons), Dip.Ed. Mr Davis is a Member of The Australian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Brian Davis is employed by Geologica Pty Ltd. Mr Davis has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which is undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Mr. Davis consents to the inclusion in the report of the matters based on the information made available to him, in the form and context in which it appears”. The information that refers to Exploration Results and Mineral Resources in this announcement was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since last reported.

It is expected that due to the simple geometry and proximity to surface that an inexpensive mining operation can be developed. In addition there is enormous potential to expand the current resource at depth and in locations along strike as the current resource is only defined to a vertical depth of ~ 100m. A HELITEM electromagnetic survey was completed at Gabanintha and indicates that a much larger body of magnetite at depth and to the west of the current resource. The Company believes that with further drilling a resource target of between 500 – 800 million tonnes at grades similar to the current JORC Code 2004 Mineral Resource Estimate.

Gabanintha Copper-Gold Project – Western Australia

The Gabanintha Copper-Gold Project is located on surrounding and adjacent areas of the Gabanintha Vanadium Project near Meekatharra in Western (see Figure 3).

The Gabanintha Copper-Gold Project is subject to a sale agreement with Bryah Resources Ltd whereby AVL has agreed to sell the precious and base metal rights on the entire Gabanintha Project with AVL retaining the rights to the vanadium, titanium, chromium, uranium, lithium, tantalum, iron ore and manganese. AVL will preserve a 0.75% Net Smelter Return royalty upon commencement of production and a 7 – 9% stake in Bryah Resources Limited upon listing, allowing the Company to benefit from any Cu/Au exploration success at Gabanintha.

Gabanintha Copper-Gold Project_Figure 4
The project comprises a highly prospective package of mafic/ ultramafic volcanics and intrusives of the Gabanintha Formation. Significant historic mining has occurred in the area with the most prominent being during the period 1987 – 1991 where the former Dominion Mining NL (now owned by Monument Mining Limited; MMY.V) open pit mined a series of gold deposits located directly north along strike from the Gabanintha Project. Deposits mined by Dominion include Yagahong, Yagahong North, Kavanagh, Terrells, Canterbury and Tunblegum. The Tumblegum Deposit is located ~ 500m north of the project boundary and is interpreted to extend into Australian Vanadium’s leases at the Tumblegum South Prospect.

Remnants of the historic mining towns of Gabanintha and Porlell date back to small scale mining activity that occurred in the early 1900’s and before (see Figure 3).

RC drilling conducted by Australian Vanadium in 2013 discovered significant new copper and gold mineralisation at the Tumblegum South Prospect including;

  • 5m @ 8.72g/t Au and 3.05% Cu from 31m downhole in GRC1158 and;
  • 5m @ 9.64g/t Au and 0.18% Cu from 58m downhole in GRC1159 (see ASX announcement dated 26th November 2013).

Mineralisation is open in all directions to the tenement boundary and the company is currently conducting a comprehensive prospectivity review of the entire tenement package to assist with target definition for follow up drilling.

Recently Australian Vanadium has expanded its copper and gold portfolio with the addition of E51/1576 in the far northwest of the project area which contains part of the Federal Bassett Shear Zone which is known to host significant gold mineralisation.

The tenement is located along strike from the Burnakara Gold Project owned by MMY.V and hosts a highly prospective >5km long Au in soil anomaly over the Federal Bassett Shear Zone. First pass shallow aircore drilling by EMU Nickel on > 1km spaced lines in 2010 produced best results of;

  • 42m @ 78ppb Au from surface including 8m @ 0.23g/t Au from 4m in hole WKAC98;
  • 4m @ 61ppb Au from 32m at EOH in adjacent hole WKAC99.

The mineralisation is hosted in a sequence of weathered mafic volcanics, sediments and felsic rocks and the wide spaced shallow drilling has not been followed up. E51/1576 will also be included in the prospectivity review for further target generation.

There is substantial competitor activity in region including gold producing companies Doray Minerals Limited (DRM.AX) and Monument Mining Limited and explorer Mithril Resources Limited (MTH.AX).

 Gabanintha Vanadium Project_figure2_schematic_geological 

Mineralisation is closely associated with a series of titaniferous magnetite bands ranging in size from a few metres to 30m thick. There are two distinct zones of mineralisation a basal, massive, high grade band and an upper disseminated band with lower grade.

The deposit is over 12km along strike, outcrops at surface and is largely continuous. Over 13,000m of drilling has been conducted on the deposit comprising 155 reverse circulation (RC) holes and nine diamond (DD) holes. These holes have been geologically logged and sampled and were used to determine a JORC 2004 Compliant Mineral Resource Estimate in 2011.

Gabanintha Vanadium Deposit – Mineral Resource Estimate
Material JORC Resource Class Million tonnes In Situ Bulk Density V205% Fe% Ti02% SI02% AL203% L0I%
High Grade Indicated 14.4 4.17 1.03 42.14 12.07 11.42 7.84 3.37
Inferred 46.0 4.16 0.97 42.15 11.19 12.37 8.28 3.20
Sub-total 60.4 4.16 0.98 42.15 11.40 12.15 8.17 3.24
Low Grade Indicated 42.7 2.71 0.44 23.37 6.08 29.25 18.09 8.94
Inferred 22.7 2.67 0.42 22.65 6.08 30.62 16.96 6.92
Sub-total 65.4 2.70 0.43 23.12 6.08 29.73 17.70 8.24
Total Indicated 57.0 2.97 0.59 28.10 7.59 24.76 15.51 7.54
Inferred 68.8 3.51 0.79 35.70 9.50 18.40 11.15 4.43
Total 125.8 3.25 0.70 32.26 8.64 21.29 13.13 5.84

Note: In-situ dry bulk density has been assigned based on V2O5 grade, therefore density values quoted here are weighted average values. The Mineral Resource was estimated as a block model within constraining wireframes based upon logged geological boundaries and grade cut-offs of 0.30% V2O5 for Low Grade (LG) and 0.70% V2O5 for High Grade (HG). Tonnages have been rounded to reflect that this is an estimate.

Gabanintha Vanadium Project_figure3

Extensive historic and modern mining has occurred immediately adjacent and within the Gabanintha Project area and stakeholders are supportive of ongoing mining and exploration activity. The Company does not expect any significant environmental impediments to future mining and exploration activity will be identified.

Engineering scoping studies into the development of a vanadium mine at Gabanintha conducted in 2009 demonstrated that an operation to mine and beneficiate ore to produce ferro-vanadium is technically and commercially viable.

Recent developments in vanadium redox battery technology for grid-scale energy storage with improved vanadium demand fundamentals have underpinned the technical assessment into production options including high purity vanadium pentoxide and by-products. The Company is focused on definition of the most economical start-up mining and product combination that minimises capital expense and maximises value.

Initial metallurgical results have been highly encouraging and this is an area of current focus within an updated scoping study. Modified Davis Tube testwork (samples crushed to 500 micron), demonstrated significant increases in grades of vanadium for massive mineralisation types (fresh and transitional) and disseminated mineralisation (fresh). Oxide, transitional and fresh ore types behave differently and further metallurgical testing is required to develop optimised beneficiation parameters.

12.2/tcol]
Sample details Fraction Wt. Dist’n V205 V205 Fe Fe SiO2 SiO2 TiO2 TiO2
Grade Distrib Grade Distrib Grade Distrib Grade Distrib
% % % % % % % % %
GRC 53 HG Fresh Massive Calc Feed 100 1.27 100 54.8 100 2.04 100 13.2 100
Conc 90.8 1.37 97.6 58.0 96.1 0.58 25.8 12.3 84.7
Tail 9.2 0.33 2.4 23.0 3.9 16.4 74.2 21.8 15.3
GRC 53 Fresh LG Dissem HW Calc Feed 100 0.58 100 29.3 100 23.8 100 7.7 100
Conc 22.4 1.59 61.3 57.8 44.2 1.64 1.5 10.30 30.0
Tail 77.6 0.22 38.7 21.1 55.8 30.2 98.5 6.9 70.0
GRG 54C High Fe Scree Calc Feed 100 0.89 100 46.4 100 11.0 100 9.04 100
Conc 13.5 1.04 15.8 56.0 16.3 3.45 4.2 8.12
Tail 86.5 0.87 84.2 44.9 83.7 12.2 95.8 9.2 87.8
GRG 63 Transition Massive Calc Feed 100 1.17 100 51.0 100 4.22 100 12.5 100
Conc 35.9 1.34 41.2 56.3 39.6 0.87 7.4 12.1 34.8
Tail 64.1 1.07 58.8 48.0 60.4 6.10 92.6 12.7 65.2

Nowthanna Hill Uranium Project – Western Australia

The Nowthanna exploration license application MLA 51/771 is located 47 km south east of Meekatharra and is accessible from the Great Northern Highway.

The tenement covers a portion of the calcrete Palaeo-channel near the Quinn’s Lake inland drainage. The predominant minerals are developed from extensive weathering and leaching of uranium-bearing domes and nearby Archaean mafic and ultramafic rocks that are high in vanadium.

In the late 1990s Acclaim Uranium NL actively explored the Nowthanna area and drill defined a historic resource which was confirmed by Australian Vanadium in 2012. The JORC 2004 compliant Indicated Resource on MLA 51/771 is;

  • 3,059,000t @ 0.437 kg/t U3O8 (see ASX release dated 20 December 2012)

The exploration potential to find further uranium on the lease is considered high due to:

  • Most drilling to date has been confined to the Palaeo-channel resource targets, not lacustrine sediment uranium targets
  • Exploration drilling and sampling on sections of the area has only been reconnaissance in nature
  • Poor coverage of detailed ground geophysics has limited the geology data.

The Nowthanna lease is located 47 km south east of Meekatharra and is accessible from the Great Northern Highway.

The tenement covers a portion of the calcrete Palaeo-channel near the Quinn’s Lake inland drainage. The predominant minerals are developed from extensive weathering and leaching of uranium-bearing domes and nearby Archaean mafic and ultramafic rocks that are high in vanadium.

The uranium exploration era began in the 1970s when WMC, Union Miniere, BHP and Rio Tinto became active across the Sandstone to Wiluna region.

The WMC uranium discovery at Nowthanna was the first calcrete-hosted style deposit found in the world. Later WMC found the massive resource, hosted in a similar style, at Yeelirrie. These leases hold an estimated 51,000 tonnes of contained U3O8.

In the late 1990s Acclaim Uranium NL actively explored the Nowthanna area and defined a JORC standard resource on the current YRR lease. The resource measured 3,289 contained tonnes of U3O8 from 7,309,450 tonnes of ore at 0,450 kg/t.

The exploration potential to find further uranium on the lease is high because:

  • Most drilling to date has been confined to the Palaeo-channel resource targets, not lacustrine sediment uranium targets.
  • Exploration drilling and sampling on sections of the area has only been reconnaissance in nature.
  • Poor coverage of detailed ground geophysics has limited the geology data.

Masking, caused by recent alluvial soil and lake cover, has limited geochemistry data.
Masking, caused by recent alluvial soil and lake cover. Significant uranium resources contiguous with the Nowthanna Hill Resource located on MLA 51/771 are owned by uranium development company Toro Energy Limited (TOE.AX).

Competent Persons Statement

The information in this statement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by independent consulting geologist Brian Davis B.Sc (Hons), Dip.Ed. Mr Davis is a Member of The Australian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Brian Davis is employed by Geologica Pty Ltd. Mr Davis has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which is undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Mr. Davis consents to the inclusion in the report of the matters based on the information made available to him, in the form and context in which it appears”. The information that refers to Exploration Results and Mineral Resources in this announcement was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since last reported.