Ferro-Alloy Resources Limited (LON:FAR) has expanded its existing vanadium concentrate processing operations as it continues financing discussions to develop its Balasausqandiq project in Kazakhstan.
The miner has completed an extension to the plant building at its existing operation and is also commissioning equipment to expand its processing plant.
The company’s production in October had also reached a record of 18.2 tonnes of concentrate and it is expecting a “significant increase in monthly production” from mid-December as the new equipment becomes fully operational.
A second major expansion has also begun which is aiming to increase production to 1,500 tonnes per year.
Meanwhile, Ferro-Alloy Resources has appointed consultancy SRK to upgrade a feasibility study of its Balasausqandiq vanadium project which is expected to be completed in the third quarter of next year.
In terms of financing, the company said it is in “advanced discussions” for a US$1.3mln loan to help fund its development plans, while it also expects to raise a significant part of the funds needed to support its activities at Balasausqandiq through project finance, and is currently in talks with banks, sovereign wealth funds, export credit guarantee departments and other specialist providers, including the Development Bank of Kazakhstan.
Despite global vanadium prices having fallen to US$5 per pound (lb) from US$16 per lb at the start of the year, faster than forecast, Ferro said it was “not a threat” to the Balasausqandiq project, with chief executive Nick Bridgen saying that the drop could be “viewed as a positive for the industry as it will allow demand to continue growing, particularly in the nascent flow battery industry, and will lead to the shut-down of high-cost opportunist production”.
“Furthermore, it highlights the clear advantage of the Balasausqandiq Project, which is expected to become the world's lowest-cost primary supplier [of vanadium]", he added.
In early trading on Friday, the company's shares were 16.1% lower at 13p.
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