REG - Ferro-Alloy Resrcs. - Positive Feasibility Study Results

Ferro-Alloy ResourcesAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251013:nRSM0760Da&default-theme=true

RNS Number : 0760D  Ferro-Alloy Resources Limited  13 October 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 (INCLUDING AS IT FORMS PART OF THE LAWS OF
ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018
("MAR").

 

13 October 2025

Ferro-Alloy Resources Limited

("Ferro-Alloy", the "Group" or the "Company")

 

Positive Feasibility Study Results

IRR of 22% and one of world's lowest cost vanadium producers

 

Ferro-Alloy Resources Limited (LSE:FAR), is pleased to announce the results of
its feasibility study on Phase 1 of the large Balasausqandiq vanadium deposit
(the "Project") in Southern Kazakhstan (the "Feasibility Study"). The
compelling economics demonstrated by the Feasibility Study show the strategic
nature of the Project and its potential to become one of the largest and
lowest cost vanadium producers globally.

The Company has also identified additional product and value engineering
opportunities with the potential to deliver significant further upside value
which will be investigated during the Project's detailed engineering phase.

The Company continues to advance discussions with a number of financial
institutions interested in providing debt and equity finance for the Project.

 

Highlights

·    Compelling economics with net present value ("NPV") of US$748m (post
tax discount rate of 8%) and Project internal rate of return ("IRR") of 22%

·    Funding required to enter production of US$520m

·    Bottom decile of industry cash operating costs, with attractive
by-product credit value upside:

o  Cash cost of US$4.35 per pound ("lb") (V(2)O(5) equivalent basis)

o  Cash cost of US$0.36/lb (net of by-product credits)

·    Vanadium pentoxide ("V(2)O(5)") price forecast of US$8.67/lb in 2029
increasing to US$10.59/lb in 2037 and thereafter

·    Annual production of 8,500 tonnes of V(2)O(5), plus 247,000 tonnes of
carbon black substitute ("CBS")

·    Mine life of 20 years

·    Phase 2 expansion could increase total production to four times the
Phase 1 level, based on ore-bodies 2, 3 and 4, ("OB2,3,4") with an equally
long mine life

·    Areas for optimisation show the potential to significantly improve
NPV and IRR following the completion of front-end engineering design ("FEED")

·    Discussions ongoing with potential customers for a new type of CBS
(announced on 27 June 2025) to be made from the mine waste, additional to the
current CBS

·    Discussions in progress, with expressions of interest received from
potential debt and equity providers

Commenting on the results of the Feasibility Study, Nick Bridgen, CEO of
Ferro-Alloy Resources, said:

"The Feasibility Study demonstrates the compelling economics of the
Balasausqandiq Project and its potential to become the one of the world's
largest and lowest cost vanadium producers.

Demand for vanadium is growing with the world market expected to enter a
deficit from 2029 onwards. By 2035 the annual deficit is expected to be more
than the total 2024 world production."

Sir Mick Davis, Chairman of the Board and Chairman of Vision Blue Resources,
said:

"The positive results of the Feasibility Study show that Balasausqandiq has
the potential to be the lowest cost primary vanadium producer in the world
with a cash operating cost of US$0.36/lb net of by-products, with significant
staged expansion potential, making it a highly attractive investment
proposition. The world needs more vanadium and Ferro-Alloy Resources has the
capability to become the global leader in the vanadium market, fulfilling the
Vision Blue Resources objective of backing strategic industry-leading assets."
 

 

Background

Most of the world's vanadium is produced from vanadiferous titano-magnetite, a
form of iron ore, using a process which requires pre-concentration and high
temperature roasting. However, the Balasausqandiq ore-body benefits from being
a black shale, which does not require concentration or roasting, resulting in
a simpler flow sheet, with lower production costs and significantly reduced
environmental emissions.

The Group previously operated a large scale 15,000 tonnes per annum pilot
plant that enabled the process to be optimised and around 20 tonnes of
ammonium metavanadate (a product which only requires a final heating stage to
convert to vanadium pentoxide) was produced and sold commercially. With
certain modifications, the pilot plant operates today as a research and
development ("R&D") centre for the Group's CBS products as well as for
treating purchased concentrates.

 

Independent Feasibility Study results

In 2021, SRK Consulting (Kazakhstan) Limited ("SRK") in conjunction with Tetra
Tech Limited ("Tetra Tech"), were commissioned to produce a feasibility study
to independently verify the Group's processes. The Group also commissioned SGS
Canada Inc ("SGS"), an international independent laboratory testing
organisation to carry out the detailed test work under the supervision of
Tetra Tech.

 

Project economics (Phase 1 only)

NPV / IRR

The projected NPV of the Project is US$748m and the projected IRR of the
Project is 22%.

Funding requirement

The table below summarises the main elements of the Project funding
requirement:

                                             US$ million
 Capital expenditure                         490.2
 Contingency                                 73.5
 Pre-production income, less costs           (43.7)
 Funding requirement to get into production  520.0

 

Capital expenditure breakdown:

                                      US$ million
 Mining                               20.5
 Sulphuric acid plant                 50.0
 Processing                           204.1
 CBS plant                            48.2
 Tailings storage facility            22.1
 Site infrastructure                  102.1
 Project, engineering and management  43.2
 Sub-total                            490.2
 Contingency (15%)                    73.5
 Total                                563.7

 

Cash cost of production

When all products are considered on a vanadium-equivalent basis, the cash cost
of production of V(2)O(5), after all royalties and taxes, is US$4.35/lb. On
this metric alone, this would make the Project the lowest cost V(2)O(5)
primary producer globally, and amongst the bottom 10% of global producers
including co-producers who make vanadium as a by-product of steel production
from magnetite.

When the net revenues from the carbon and other by-products are deducted from
costs the forecast net cash operating costs are reduced to US$0.36/lb
V(2)O(5).

Production output

Annual production from the Project is expected to be 8,500 tonnes of V(2)O(5)
and 247,000 tonnes of CBS as well as minor quantities of uranium and
molybdenum.

 

Funding

The Company has received expressions of interest from potential debt and
equity providers interested in financing the Project's construction. The
Company intends to further enhance the return on investment to equity
investors by securing an attractive debt financing package for the Project and
engaging strategic investors for equity financing.

Northcott Capital Limited and Oval Advisory Limited have been appointed as
lead financial advisers and are assisting the Company in its engagement with
interested parties.

 

Value enhancement opportunities

During completion of the Feasibility Study, the Company identified areas for
optimisation and value enhancement beyond those included in the final
Feasibility Study. It is expected that further investigation during the FEED
stage of the Project could lead to significant further improvement in Project
economics.

The following are the areas which the Company believes have potential for
optimisation which could reduce capital and operating costs, increase
production, and significantly improve the Project NPV and IRR.

Reagent consumption and metallurgical recovery

The Feasibility Study has incorporated the higher level of reagent consumption
that was indicated by the laboratory-scale test work carried out by SGS,
achieving a metallurgical recovery of 86.2%. Significantly lower reagent
consumptions were used in the much larger scale historical pilot test work
programme, also achieving a higher metallurgical recovery. The Group's
technical team believe that lower reagent consumption and higher recovery can
be achieved in actual operations, and this will be tested further in the next
phase.

Carbon recovery

Carbon concentrator recovery was tested by SGS but the potential to enhance
recoveries by recirculating the concentrator tailings is still to be
confirmed. Although a conservative estimate of recovery is included in the
Feasibility Study, there are indications that a higher recovery might be
achievable. This would be expected to increase the scale of CBS production,
expanding the Company's by-product value, and further reducing the Project's
already industry leading forecast net cash operating costs.

CBS dry milling

The Feasibility Study design for the milling of the CBS product is premised on
wet milling. The decision to select wet milling was made for Feasibility Study
purposes, however the Group has installed and tested a 400 kg per hour dry
milling test plant and achieved excellent results, albeit testing with milled
ore rather than concentrate. The use of dry milling greatly simplifies the
operation as filtration and drying of finely milled powders is avoided. The
Company believes that it is likely that this part of the operation will be
changed to a dry milling process during the FEED stage of development,
delivering significant capital cost savings and further enhancement of Project
economics.

New CBS product

The Company has developed a new CBS product (see Company announcement dated 27
June 2025) which can be made from the high-carbon waste to be mined to access
the vanadium ores. This is in addition to the original CBS product which is
made by concentrating the carbon in the tailings from the vanadium treatment
plant. The new material has not been included in the Feasibility Study. No
scheduling of production has yet been carried out but the amounts of suitably
high carbon material within the waste already scheduled to be mined would
indicate that an average of around 225,000 tonnes of this new type of material
might be produced per year in addition to the 247,000 tonnes of the original
CBS that have been included in the Feasibility Study. This material is
available at no additional mining cost, requiring limited capital expenditure
on crushing and dry milling. Discussions with potential customers are
continuing after successful laboratory testing. Further bulk testing of this
product is planned.

Value engineering

The Company's operational team has gained considerable experience in
procurement and fabrication through the construction and development of the
Company's existing operations. The Company believes that there is the
opportunity to negotiate more favourable terms with suppliers than those
included in the Feasibility Study, particularly regarding local and regional
services and equipment.

 

Mineral Resources and Ore Reserves

 

 Resource Class      Weathering grade  Mass (Mt)  Grade (%)                       Material Content (tonnes)
                                                  V(2)O(5)  Mo      U       C     V(2)O(5)  Mo       U        C
 Measured            -                 -          -         -       -       -     -         -        -        -
 Indicated Resource  Oxide             1.56       0.67      0.0139  0.0047  7.16  10,560    216      73       112,151
                     Transitional      1.25       0.66      0.0138  0.0045  7.17  8,260     172      56       89,869
                     Fresh - sulphide  30.08      0.61      0.0150  0.0052  8.83  184,814   4,523    1,554    2,655,454
                     Total             32.89      0.62      0.0149  0.0051  8.69  203,634   4,911    1,683    2,857,473
 Inferred            -                 -          -         -       -       -     -         -        -        -
 * Differences may occur in totals due to rounding.

 

 Ore Class         Weathering grade    Mass (Mt)  Grade (%)                       Material Content (tonnes)
                                                  V(2)O(5)  Mo      U       C     V(2)O(5)  Mo       U        C
 Probable Reserve  All Material Types  30.93      0.59      0.0143  0.0049  8.35  181,781   4,421    1,520    2,528,596

* The Balasausqandiq Ore Reserve Statement has its effective date as 30
September 2025, and is reported at a cut-off grade   of 0.29% V2O5 Eq within
an optimal pit shell.

 

 

The Reporting Standard adopted for reporting of the Mineral Resource and Ore
Reserve Statements for the Project is that defined by the terms and
definitions given in "The 2012 Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves as published by the Joint Ore
Reserves Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia" (the
"JORC Code (2012)").

 

The JORC Code (2012) has been aligned with the Committee for Mineral Reserves
International Reporting Standards ("CRIRSCO") reporting template.

 

Mining

 

The Balasausqandiq mine will comprise a conventional drill and blast, truck
and shovel open pit operation, with waste rock dumps located externally to the
pit. The open pit operation is planned to deliver 30.9 million tonnes ("Mt")
of ore from 167.7 Mt total material mined, over a mine life of 20 years, with
an average strip ratio of 4.4 tonnes of waste per tonne of ore, with average
grades of 0.59% V(2)O(5), 8.35% carbon, 0.005% uranium and 0.014% molybdenum.

 

 

Metallurgy

 

The Feasibility Study test work programme was designed to independently verify
the processes developed by the Company for the efficient extraction of
vanadium, molybdenum, uranium and carbon products from the Balasausqandiq
black shale ore. The bulk and variability testing programme at SGS used ore
samples representative of the Balasausqandiq mineralisation selected by
Company geologists and Tetra Tech. The tests completed on crushing, grinding,
leaching, impurity removal, product purification, carbon, solid liquid
separation and tailings management provided SRK and Tetra Tech validated
measurements to support performance parameters, equipment selection and
financial metrics. Additional process improvement opportunities have been
identified during the Feasibility Study that will be considered and
incorporated during the following detailed design phase.

 

 

Carbon

 

The ore at Balasausqandiq contains around 8.35% carbon which flows through to
the tailings from the vanadium extraction process. Test work carried out by
SGS indicated that the carbon level in these tailings can be concentrated to
40% carbon with a recovery of 72%. Further test work carried out by specialist
rubber testing consultants indicated that this material can be used as a
reinforcing filler in partial replacement for carbon black in making rubber.
When used in tyre sidewalls (a major use of carbon black) the tyre performance
was not materially different from tyres with the reinforcing filler made
wholly from carbon black. The expected annual production of this CBS product,
following commissioning of the main plant, is around 247,000 tonnes.

 

 

Vanadium for electrolyte for the vanadium redox flow battery market

 

At the existing process plant, the Company has successfully tested the
production of high purity V(2)O(5), as well as vanadium trioxide suitable for
making battery electrolyte, and the electrolyte itself. The Feasibility Study
envisages the sale of vanadium pentoxide flake, suitable for the steel
industry, but it is recognised that as the market for vanadium redox flow
batteries ("VRFBs") develops, an increasing proportion of the market will
include these other vanadium oxides, or the electrolyte itself. The necessary
small changes to the plant can be made either at a later date or during the
engineering phase prior to construction.

 

Currently, high purity vanadium is used for battery electrolyte, chemical,
aerospace and military purposes and sells for a premium price. This potential
benefit has not been incorporated into the financial model for this
Feasibility Study.

 

 

Markets

 

Vanadium

 

The Company commissioned CRU International Limited ("CRU") to assess the
available markets and pricing for standard grade V(2)O(5) and to take account
of the geography and logistics costs.

 

CRU advised that a deficit of supply is likely to emerge from 2029 onwards,
with use of V(2)O(5) in long term energy storage batteries rising rapidly to
account for some 76% of annual V(2)O(5) demand by 2040. Indeed, CRU foresee a
deficit of some 171,000 tonnes of V(2)O(5) per annum arising by 2035, which is
larger than the entire market in 2024.

 

Bearing in mind logistics for different locations of customers, CRU forecast
net-back prices at factory gate for the Company of:

 

               Net-back
 Year          Per lb V(2)O(5)
               US$ 2025 real
 2028          8.02
 2029          8.67
 2030          9.05
 2031          9.43
 2032          9.81
 2033          10.19
 2034          10.60
 2035          10.60
 2036          10.60
 2037 onwards  10.59

 

 

CBS

 

Global market consultants, Smithers Information Limited ("Smithers") advised
that, based on the results of technical tests on rubber made from CBS, and by
comparison with other reinforcing fillers on the market, the material can be
sold for US$500 per tonne in the tyre market and up to US$600 per tonne in the
non-tyre market. The Company has utilised a price assumption of US$500 per
tonne in the Feasibility Study. Achievement of the higher US$600 per tonne
pricing would further increase the Project's forecast EBITDA by US$24.7m per
annum, solely from the Company's 247,000 tonnes of initial CBS production.
Further value may be derived from the saving to customers of emissions tariffs
owing to the much lower CO(2) embedded emissions of CBS compared with carbon
black.

 

 

Environment

 

Vanadium

 

When vanadium is used as an alloy, the additional strength and performance of
the resulting steel significantly reduces the quantities of steel required.
Steel production accounts, very broadly, for around 10% of world CO(2)
emissions, so increasing use of high quality vanadium containing steels can
play a significant role in minimising this source of global warming.

 

VRFBs are the leading technology for large scale, long duration, energy
storage batteries which are increasingly needed as the use of intermittent
renewable energy sources makes up an increasing proportion of energy
generation. The increase in demand for vanadium for this purpose is expected
by CRU to lead to a shortage of vanadium, starting in 2029. Balasausqandiq is,
therefore, essential to the world's move to renewable energy and the
mitigation of global warming.

 

 

 

 

CBS

 

Production of carbon black from current industrial manufacturers is a highly
polluting process, involving the combustion of heavy hydrocarbons in an oxygen
depleted atmosphere, resulting in CO(2) emissions of between 2 to 3 tonnes per
tonne of product, as well as other harmful polluting off-gases. However, FAR's
CBS products would be produced from the wastes from mining and processing of
vanadium ores, resulting in no additional emissions being generated.
Subsequent milling, drying, bagging and transport are expected to amount to
less than 0.25 tonnes of CO(2) emissions per tonne of CBS product. The net
benefit of FAR's CBS product versus conventional carbon black products, would
thus provide a forecast reduction in emissions of approximately 90%.

 

Compliance with global standards

 

The Company's environmental consultants have undertaken numerous baseline
studies and other reviews taking into account the requirements of the various
ESG based standards including the Equator Principles and the IFC's Performance
Standards. No issues have been identified that would prevent the Project from
progressing.

 

 

Feasibility Study service providers

 

The Feasibility Study service providers were SRK holding overall
responsibility for the Feasibility Study, Tetra Tech for metallurgy and
process plant design, SGS for laboratory test work, CRU providing V(2)O(5)
price forecasting and vanadium market insight and Smithers who carried out the
technical and marketing reports on the CBS.

 

Future phases

Phase 1 is based only on OB1, the first ore-body out of seven within the
Group's licence area for which there is geological evidence. Of the remaining
six ore-bodies, OB2,3&4 have been explored and full assay and mineral
resource estimates will be published in due course. However, preliminary
analysis, based on semi-quantitative x-ray fluorescence of OB2,3&4,
indicates that there will be ample resource to consider an additional Phase 2
operation at a scale of around three times larger than Phase 1 with a
similarly long mine life. No study has yet been made but the ore is known to
be very similar and mining and metallurgical processes are also expected to be
similar allowing further upside. The remaining ore-bodies have not been
explored but will remain for further future development.

 

ENDS

For further information, visit www.ferro-alloy.com or contact:

 

 Ferro-Alloy Resources Limited  Nick Bridgen (CEO) / William Callewaert (CFO)  info@ferro-alloy.com

 Shore Capital                  Toby Gibbs / Lucy Bowden                       +44 207 408 4090

 (Joint Corporate Broker)

 Panmure Liberum Limited        Scott Mathieson / John More                    +44 20 3100 2000

 (Joint Corporate Broker)

 BlytheRay (Financial PR)       Tim Blythe / Megan Ray / Will Jones            +44 20 7138 3204

                                                                               Ferro-Alloy@blytheray.com

 

Notes to Editors

About Ferro-Alloy Resources Limited:

The Company's operations are all located at the Balasausqandiq deposit in
Kyzylordinskoye Oblast in the South of Kazakhstan.

Balasausqandiq is a very large deposit, with vanadium as the principal product
together with the CBS and several by-products. Owing to the nature of the ore,
the capital and operating costs are very much lower than for other vanadium
projects.

The most recent mineral resource estimate for ore-body one (of seven) provided
an Indicated Mineral Resource of 32.9 million tonnes at a mean grade of 0.62%
V(2)O(5) equating to 203,634 contained tonnes of V(2)O(5). In the system of
reserve estimation used in Kazakhstan the resources are estimated to be over
70 million tonnes in ore-bodies 1 to 5, but this does not include the full
depth of ore-bodies 2 to 5, or the remaining ore-bodies which remain
substantially unexplored.

The grade of carbon in the deposit is over 8%. The carbon flows through to the
tailings from where it is concentrated, in a simple low-cost operation, into a
40% carbon product, the CBS, that can be used in place of carbon black as a
reinforcing filler in the making of rubber. A further CBS product has been
identified based on the high-carbon but low-vanadium material within open-pit
the waste material.

The Project will be developed in at least two phases, Phase 1 and Phase 2,
with Phase 1 treating 1.65 million tonnes per year.

There is an existing concentrate processing operation at the site of the
Balasausqandiq deposit. The production facilities were originally created from
a 15,000 tonnes per year pilot plant, which was then expanded and adapted to
recover vanadium, molybdenum and nickel from purchased concentrates.
Alongside this operation, there is a well-equipped laboratory and highly
skilled technical team, who have already developed the technology that is
being built into the Feasibility Study and is further developing and
optimising processes needed for future vanadium and carbon operations. The
plant will operate only when profitable concentrates are available and, when
not operating as a production facility, will operate on an expanded basis as
an R&D centre.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCFFMEFEEISEDS



            Copyright 2019 Regulatory News Service, all rights reserved