Strategic Resources Provides Mustavaara and Vanadium Market Updates
Strategic Resources Provides Mustavaara and Vanadium
Market Updates
Highlights:
Key permit and environmental monitoring work is ongoing at Mustavaara
The European Ferro-vanadium market has seen prices increase from
US$32.55
/kg to
US$49.75
/kg since
December 2021
, a
53% increase
The pig iron market has seen prices increase to over
US$600
/tonne versus the
US$450
/tonne used in the 2021 PEA
VANCOUVER, BC
,
March 7, 2022
/CNW/ -
Strategic Resources Inc.
(TSXV: SR) (the "Company" or "Strategic") is pleased to
update shareholders on advances at the Mustavaara vanadium-iron project (the "Project") and recent activity in the vanadium and pig
iron markets.
Mustavaara Project Advancement
1
.
Exploration permit applications to transition the Project from reservation status were made in
November 2021
. This will advance
all the concessions at the Project to the exploration license phase.
2
.
An application to extend the existing water permit allowing for future construction of mining operations at the Project was
delivered to The Regional State Administrative Agency for
Northern Finland
in
February 2022
. It is Strategic's expectation that,
once approved, this will extend the permit an additional three years to mid-2025.
3
.
A proposal for an environmental baseline monitoring program was sent to The Centre for Economic Development, Transport and
the Environment of North Ostrobothnia in
November 2021
. Strategic has received positive initial feedback on the program and will
commence its monitoring efforts once formal approval has been received.
Further to the above-noted advancements and robust metal price environment, the Company is evaluating commencing a Pre-
Feasibility Study ("PFS") and recommencing the permitting work to construct the smelter that was contemplated in the 2021
Preliminary Economic Assessment ("PEA"). Initial work on permitting the smelter was conducted by Ferrovan Oy in 2018/2019 and
the city of Raahe has made allowances for its construction in their land use planning. A decision on commencing a PFS is expected to
be made in Q2 2022.
Mustavaara 2021 Preliminary Economic Assessment Summary
(1)
The 2021 PEA outlined a 20-year mine life project that would produce 4.6 kt of Ferro-vanadium ("FeV80") and 329 kt of pig iron per
year. The 20% commodity price increase sensitivity case that used
US$38.40
/kg FeV80 and
US$540
/tonne pig iron for metal prices
showed an after-tax NPV
8%
of €491 million and a 17.9% internal rate of return (see table below). Spot prices are
US$49.75
/kg
FeV80 in
Europe
and
US$600
to
$750
/tonne pig iron depending on geography.
% of Base Case Prices
80%
100%
120%
FeV80 (US$ per kg)
US$25.60
US$32.00
US$38.40
Pig Iron (US$ per tonne)
US$360
US$450
US$540
Pre-Tax NPV (8%) (€M)
€ (88)
€286
€661
Pre-Tax IRR
5.8%
13.9%
20.2%
Post-Tax NPV (8%) (€M)
€ (115)
€190
€491
Post-Tax IRR
5.0%
12.2%
17.9%
Vanadium and Pig Iron Market Activity
(2)
(3)
Prior to the conflict in
Ukraine
, rising FeV80 prices in
China
and
Europe
were driven primarily by new demand for structural steel.
Prices rebounded from the lows of
US$21
/kg during 2020 back to
US$39.25
/kg in
January 2022
. The recent conflict in
Ukraine
has
caused FeV80 prices to increase further to
US$49.75
/kg in
Europe
. Russian-owned Evraz represents approximately 17% of global
vanadium production from the reprocessing of vanadium-bearing slag from their steel furnaces.
Continued adoption of Vanadium Redox Flow batteries ("VRFB") is also providing new demand for vanadium. Chinese vanadium
demand for energy storage batteries is expected to triple this year as
China
looks to bring on new VRFB battery systems. Western
VRFB developers such as Largo Inc. and Invinity Energy Systems have been making substantial advances on the production and sale
of VRFB systems. Largo Inc. has also announced the launch of Largo Physical Vanadium Corp., which will hold physical vanadium
that may be leased for long-term use in VRFBs sold through Largo. The initial financing for the physical trust is underway and is
expected to raise up to
C$20 million
.
Pig iron prices have been well over the
US$450
/tonne used in the PEA, with current prices between
US$600
to
US$750
per tonne.
The Ukrainian conflict has stopped Black Sea pig iron shipments. Ukrainian pig iron production has been idled and Russian pig iron
producers are not able to get new supply to market easily. With
Russia
and
Ukraine
accounting for 60% of U.S. pig iron imports,
consumers are turning to
Brazil
, but finding minimal relief given the lack of additional capacity.
Mustavaara and
Finland
have excellent potential to be reliable long-term suppliers of vanadium and pig iron into European and U.S.
markets.
Corporate Matters
The previously announced application to extend Strategic's currently issued warrants to purchase up to 3,585,000 common shares at
an exercise price of
$0.55
per share by one year, to
April 20, 2023
, was approved by the TSX Venture Exchange.
Notes
1
.
For further details on the PEA estimates for the Project, please see the Company's technical report entitled "NI 43-101 Technical Report on the Mustavaara Vanadium project, Finland" with an effective date of May 4, 2021,
authored by Afry Finland Oy. The report can be found on SEDAR or at
https://strategic-res.com/projects/finland/mustavaara/technical-report/
.
2
.
Vanadium market commentary sourced from broker research and public disclosure.
3
.
Pig iron commentary sourced from Argus Media as of March 2, 2022.
About Strategic Resources
Strategic Resources Inc. (TSXV: SR) is a
Vancouver, Canada
-based mineral exploration and development company focused on
vanadium projects in
Finland
. The Company is primarily focused on its flagship Mustavaara vanadium-iron-titanium project in
Finland
.
The Company continues to evaluate new opportunities that are related to the electrification of the economy.
Further details are available on the Company's website at
https://strategic-res.com/
.
To follow future news releases, please sign up at
https://strategic-res.com/contact/
.
STRATEGIC RESOURCES INC.
Signed:
"
Scott Hicks
"
Scott Hicks
, CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Information
Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements
and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information
include but are not limited to statements or information with respect to extending existing environmental permits, being granted
exploration licenses for the Mustavaara concessions and evaluating commencing a PFS. Often, but not always, forward-looking
statements or information can be identified by the use of words such as "will" or "projected" or variations of those words or
statements that certain actions, events or results "will", "could", "are proposed to", "are planned to", "are expected to" or "are
anticipated to" be taken, occur or be achieved.
With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions
including among other things, assumptions about general business and economic conditions, the prices of vanadium and pig iron,
and anticipated costs and expenditures. The foregoing list of assumptions is not exhaustive.
Although management of the Company believes that the assumptions made and the expectations represented by such statements
or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be
accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown
risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or achievements expressed or implied by such forward-
looking statements or information. These factors include, but are not limited to: risks associated with the business of the Company;
business and economic conditions in the mining industry generally; the supply and demand for labour and other project inputs;
changes in commodity prices; changes in interest and currency exchange rates; risks relating to inaccurate geological and
engineering assumptions (including with respect to the tonnage, grade and recoverability of reserves and resources); risks relating
to unanticipated operational difficulties (including failure of equipment or processes to operate in accordance with specifications or
expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government
approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters);
risks relating to adverse weather conditions; political risk and social unrest; changes in general economic conditions or conditions
in the financial markets; and other risk factors as detailed from time to time in the Company's continuous disclosure documents
filed with Canadian securities administrators. The Company does not undertake to update any forward-looking information, except
in accordance with applicable securities laws.
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SOURCE
Strategic Resources Inc.
View original content:
http://www.newswire.ca/en/releases/archive/March2022/07/c7474.html
%SEDAR: 00021914E
For further information:
Scott Hicks, [email protected], T: +1 604 646 1890
CO: Strategic Resources Inc.
CNW 07:00e 07-MAR-22