Australian Vanadium Ltd (ASX:AVL) has boosted its finances to the tune of $9.8 million thanks to the first milestone payment of a Commonwealth of Australia grant of up to $49 million.
This grant provides funding support to assist AVL, in collaboration with industry partners, to create an Australian vanadium battery industry incorporating domestic downstream processing, centred on the Australian Vanadium Project
READ: Australian Vanadium executes $49 million Federal grant to support domestic vanadium battery industry
The first milestone payment follows the company executing a Commonwealth Grant Agreement on May 30, 2023, with the Federal Government, represented by the Department of Industry, Science and Resources.
It comes as part of the government’s Modern Manufacturing Initiative - Manufacturing Collaboration Stream.
To support vanadium value-add strategy
The initial payment will be followed by three further payments, with the final payment scheduled for August 2025.
Grant funds will support value-adding to the company’s flagship Australian Vanadium Project, one of the most advanced critical mineral vanadium projects being developed globally, with the potential to produce 11,200 tonnes per annum of vanadium pentoxide over a mine life of 25+ years.
The project has a JORC 2012-compliant resource of 239 million tonnes at 0.73% vanadium pentoxide (V2O5), including a high-grade zone of 95.6 million tonnes at 1.07% V2O5 and an ore reserve of 30.9 million tonnes at 1.09% V2O5.
Use of funds
These Federal Government funds will support eligible activities to construct and commission a concentrator and high-purity vanadium processing facility capable of using green hydrogen as part of the extraction process for the project.
The critical mineral extraction process is a key precursor for vanadium electrolyte manufacturing.
On executing the grant agreement, AVL’s CEO Graham Arvidson said, “AVL has been working closely with the Australian Government and we are pleased to announce execution of the agreement.
"The grant will be of great benefit to AVL as we seek to optimise and finalise our financing and offtake arrangements and continue to move the project forward for the benefit of the mid-west region of Western Australia, and Australia more broadly.
"We are very grateful to the Australian Government and the grant team who worked tirelessly to finalise this important outcome.”
Scope of grant
The scope of the grant encompasses support for all stages of the vanadium production value chain, from mining and concentrating to vanadium processing for use in electrolyte production, a key enabler for the Australian vanadium redox flow battery industry.
As part of the activities under the grant, AVL will also collaborate with Bryah Resources Limited to explore options to extract cobalt, nickel, copper and gold economically from the project.
Broader activities needed to realise the overall project, such as development of the mine and supporting infrastructure, will be funded from sources other than the grant.
This agreement has a commencement date of May 29, 2023, and ends on July 31, 2026.