I have had the pleasure of speaking with Paul Cowley a number of times on the phone and in person here in beautiful Vancouver, BC. I had First Vanadium brought to my attention by a trusted peer and friend and was impressed with the technical approach First Vanadium’s management brought to an incredible jurisdiction and land package. This is a company that is focused on data and all the management brings specific technical expertise. That quality of management coupled with the scientific approach is not lost on the solid share structure, trading volume and price of the company which is setting itself up for a great spring.
Recently, On Feb.21 First Vanadium announced that it was named a 2019 TSX Venture 50TM Company, an annual ranking of the top performers on the TSX Venture Exchange.
This is a maiden resource for First Vanadium Corporation on the Carlin Vanadium deposit, in the Carlin Gold Trend of Nevada. This announcement February 27, 2018 is a significant improvement over the historic levels on all metrics and worth taking note. The key criteria when looking at projects is the resource, the location and management. If we are able to show any comparables or comparisons then it helps to evaluate the feasibility of a project. To have such significant gains is worth impressing upon people.
To show how significant these new numbers are, it is necessary to compare to the historic level.
- Prior to FVAN’s drilling in 2018 there was a 2010 historic Inferred estimate of 28M short tons @0.515% V2O5 containing 289 million pounds of V2O5 from 127 drill holes dating back to the 1960’s. This was already a sizeable amount of contained metal and value in this deposit of about US$5 billion worth (at China spot prices of US$17.60/lb flake).
- FVAN did 2 drill campaigns in 2018 totalling 89 holes; most of these holes about 60% were infill holes to tighten up the drill spacing and improve on the confidence of the geology, grade and thickness of vanadium zones. The other holes were step-out holes to expand on the dimensions of the deposit. The results of this work have paid off. FVAN spent about $1 million on the two drill programs added about US$1.5 billion of new in-the-ground metal value (at spot price).
In every metric of the maiden resource, there was an improvement!
It saw an increase in grade by 19.4% from 0.515% to 0.615 %V2O5, and saw an increase of the total contained pounds of metal in the deposit from 289 million pounds of V2O5to 378 million pounds of V2O5- a 30.8% gain! That is a significant increase and provides substantial data to support all the previous work done by management.
It saw an increase in the total tons from 28Mstto to 89Mstto, which is an increase of 13.7%. It also upgrades a sizeable amount of the Inferred estimate to the Indicated category by 13.7%. All of these aspects are very strong improvements and positives for the project and company. More than confirming, it strengthens the claim of being the largest, highest grade primary vanadium deposit in North America.
An important note on vanadium prices: vanadium was the best performing metal in 2018 and although near the end of the year corrected down on short term overreaction, the metal is on the climb again at US$17.60/lb flake China, my position is that prices will remain strong for this metal of the future. The elements of stronger demand and tight supply have gotten even more pronounced with the Nov 1, 2018 Chinese legislation requiring more vanadium in their rebar than before, which has been estimated by some to cause a further 20% annual demand over supply. I have commented on the list of factors effecting Vanadium prices in my article Vanadium, The Norse Goddess of Fertility…
To sum it all up, we have a compelling story about a much needed resource, with marked improvement upon historical reserves in a highly favourable location and infrastructure access for this project, it’s important to note that it’s located in the world-class Carlin Gold Trend. The project is 6 miles by road to a major rail hub and highway, power and the mining community of Carlin, Nevada. The management has a proven track record of expertise, is meeting milestones and is positioning the company for a big Spring and summer. Wrapping it all up together is the fact that the corporate share structure is superb with only 38.8 million shares out makes this a tightly held float with lots of room to grow.
Securities Disclosure: I, Andrew O’Donnell, hold no direct investment interest in any company mentioned in this article. Also, I was not paid for this article.