REG - Ferro-Alloy Rsrcs - Q2 2024 Production Results

Ferro-Alloy ResourcesAnnouncement

18/07/2024 07:00

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RNS Number : 8304W  Ferro-Alloy Resources Limited  18 July 2024

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").

 

18 July 2024

Ferro-Alloy Resources Limited

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

 

 Q2 2024 Production Results

 

Ferro-Alloy Resources Limited (LSE:FAR), the vanadium producer and developer
of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, announces
the production results of the Group's existing operation for Q2 2024.

 

Q2 Production Results

 

                                         2023                              2024
                                         Q1     Q2       H1       FY 2023  Q1     Q2     Q1 / Q2 % change  H1       H1 % change

                                         2023   2023     2023              2024   2024                     2024

 Tonnes of concentrate processed         194.1  1,016.6  1,210.7  2,228.0  668.6  777.5  +16.3%            1,446.1  +19.4%

 Tonnes of vanadium pentoxide produced*  31.3   141.4    172.7    310.5    81.6   87.6   +7.4%             169.2    -2.0%

 Tonnes of molybdenum produced**         6.5    14.1     20.6     34.4     7.1    6.9    -2.8%             14.0     -32.0%

 Tonnes of nickel produced***            9.7    50.8     60.5     111.4    33.4   38.8   +16.2%            72.2     +19.3%

 

*     partly contained in ammonium metavanadate

**   in ferro-molybdenum

*** in nickel concentrate

 

Commentary

During the quarter the Company continued to build on the improvements made to
the plant in Q1 2024, in order to enhance its processing capabilities,
including the expansion of the solution ponds which will allow the Company to
increase the purity of its vanadium pentoxide product and, therefore, improve
resulting selling prices.

Production of vanadium pentoxide during Q2 2024 was 7% greater than Q1 2024,
largely driven by a higher tonnage of concentrate processed during the period.
H1 2024 vanadium pentoxide production was at similar levels to H1 2023 but, as
a result of different grades of concentrate being treated, a 32% reduction in
molybdenum output.

Production Outlook

The Company will continue to treat raw materials partly on a trading basis and
partly on a tolling basis, eliminating the risk of price movements between the
time of purchase of concentrates and the sale of the product.

The Company has been stockpiling nickel-rich concentrates which are the
residues from the prior production of vanadium and molybdenum from
concentrates. Some 4,000 tonnes are now on site. These residues can be sold at
low prices as low-grade nickel concentrates. However, the Company has
developed new technology to upgrade these residues to standard nickel grades
and to recover further amounts of vanadium and molybdenum which were not
recovered in the initial processing. Laboratory testing has showed good
results and trial processing at a commercial scale has commenced. After a
period of optimisation of operating regimes, and provided the results are in
line with laboratory test-work, the Company will commence full production
during Q3 2024.

Processing of these residues will use the full capacity of the plant for
several months, with monthly production of vanadium and molybdenum expected to
be only a little lower than that achieved from the treatment of bought-in
concentrates.

Once the stockpile of nickel-rich concentrates is used up, the treatment of
concentrates will resume, with periodic treatment of the resultant nickel-rich
residues.  Overall recovery of vanadium and molybdenum from the bought-in
concentrates will therefore rise as well as yielding the increased revenue
from the nickel concentrates.

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

"Current trading conditions are difficult but the innovative approach of our
technical team to find alternative routes to profitability are bearing fruit
and we look forward to seeing the results come through."

 

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)
 St Brides Partners Limited        Ana Ribeiro / Isabelle Morris                  +44 207 236 1177

 (Financial PR & IR Adviser)

 

 

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. Currently the Company has
two main business activities:

a) the high grade Balasausqandiq vanadium project (the "Project"); and

b) an existing vanadium concentrate processing operation (the "Existing
Operation")

Balasausqandiq is a very large deposit, with vanadium as the principal product
together with several by-products. Owing to the nature of the ore, the capital
and operating costs of development 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 203,364 contained tonnes of vanadium pentoxide
("V(2)O(5)"). In the system of reserve estimation used in Kazakhstan the
reserves are estimated to be over 70m 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 Project will be developed in two phases, Phase 1 and Phase 2, treating 1m
tonnes per year and an additional 3m tonnes per year. Production will be some
5,600 tonnes of V(2)O(5) from Phase 1, rising to 22,400 tonnes V(2)O(5) after
Phase 2 is commissioned.

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.

The existing operation is located on the same site and uses some of the same
infrastructure as the Project, but is a separate operation which will continue
in parallel with the development and operation of the Project.

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