Last week at the 121 Mining conference in London I sat down with Paul Cowley, CEO of First Vanadium Corp, to talk about his company, the increasing demand for vanadium, and his plans for 2019.
On The Next Bull Market Move we have the CEO of First Vanadium, Paul Cowley, how are you today Paul?
Doing excellent, lots of interest here in London.
Yes, we were just talking before the interview about how busy you were. So do you think the sentiment has picked up because of the surge in the vanadium price?
Yes, I would say so. I've had a full agenda for the two days, 15 meetings each day. Lots of interest from high net worth individuals, from funds, from family offices.
We were also talking before the interview about the infrastructure of your deposit and that is actually American-based, in Nevada. Can you just talk about that, give me some details?
Yeah, this is an extraordinary deposit because of its location and some of its features, but from the location and infrastructure, we're basically in the Carlin gold trend, where such massive amounts of gold have been taken out of the ground by Barrick and Newmont. We're in the southern trend of the Carlin gold trend.
So a lot of the infrastructure they've developed in the last 30 to 40 years from all that mining is now at our disposal. So the community is our mining base, the workforce is predominantly mining-based in this community. There's vendors, mining equipment suppliers, engineering firms, environmental firms, they all have offices in Elko.
And Carlin is only six miles by road, and there's a major rail hub that services both coasts with rail. So there is lot’s of outstanding infrastructure.
We were also talking before the interview about how this deposit was ignored or just forgotten about, let's talk about that.
That's another extraordinary case where this was a deposit that was discovered by a major mining company in the 1960s. They drilled it off for production, had enough to go into production but the economics of the day just didn't live up to expectations, so they basically abandoned it.
This project's been overlooked and undervalued for 50 years where there's been no work since then, since we came along. We picked it up from a local prospector and got a very good deal on the early stage of the vanadium metal price boom and we've been very, very happy with our partners and advancing the project through very methodical, technical project driven milestones that we've been hitting and exceeding along the way.
So we've seen our share price moving over the last year from under 10 cents before we acquired the project to, it's gone up as high as $2. So very, very healthy trend in our share price performance.
Can I have your thoughts on the vanadium price at the moment, the market? The last couple of years it's gone up a lot, and a lot of new investors are now taking a look at this space.
Well, just to give a little bit of background of what's happened because we're in a new norm for vanadium, that’s never been there before. There's been very significant fundamentals that have changed, that influenced the supply and demand. We've been in a supply deficit for five years now in vanadium.
The current producers in China, Russia and South Africa and Brazil are not able to match the demand. And that demand's increasing on an annual basis of about 3.5 to 4%. And that's brought the price of vanadium from $3 a pound to $34 a pound in a matter of three years. That's never happened before where there's been a steady growth like that, and a sustainable one.
Now what we're gonna see now is an acceleration of that demand because there's new things like Chinese legislation that's requiring 30% more vanadium in Chinese rebar, in car chassis that are putting vanadium in to make them lighter and more fuel efficient, into redox flow batteries that power companies are installing in their power grid so that they modulate and store large capacities of electricity. And there's even a certain amount of vanadium in the EV batteries.
These are all new demands, as well as trillions of dollars of infrastructural projects that are on the books in China, Russia and America. Those are all new demands. So we see the demands are increasing at a rapid rate, the supply line, the companies that are producing are making efforts to increase their production, but it's only incremental, as all the projects that are out there in the world are looking to get finance and to go into production. It's a slow go, because a lot of them are high capex.
And the only way that they can get funding is to tone down the capex and so those projects will get funded but in a much smaller scale which would mean then a smaller amount of input from the supply line.
As a final question, what plans do you have for next year and if a new investor was taking a look at your company, how would you describe it?
Okay, well for the next two months, we're seeing the remainder of our 63 holes that we've drilled in the summer, we've got 53 more holes to report. That'll follow with a resource calculation in January, I think that'll be a really good milestone for us. And then we would be moving very quickly in the first quarter of next year into a pre-feasibility.
So all of next year, maybe by the fall or third to fourth quarter next year we'll have a pre-feasibility completed. And that's a very, very tight window. So we're unlocking value very quickly for the shareholder, we've gone basically as I mentioned, from 10 cents to trading at about $1.20 right now, and we've gotten as much as $2.
We've gotten 15, 20 times to the early investors. We see in the next 12 months more value being added because the project is proceeding through technical stages, that we're hitting those milestones, we're beating and exceeding those milestones. So we see more value added to the project, particularly once the pre-feasability's out there. This will all change the picture and we will be able to quantify our asset that much better moving forward.
Then our goal would be for 2020 to go through a feasibility. We're well funded all the way to the beginning of the feasibility, so we don't need to raise any more money. So we're very healthy from a share position, dilution standpoint. I think this is a very, very strong asset with lots of value. The metal in the ground according to the current historic resources is 10 billion dollars of metal in the ground, which raises eyebrows when you put it in those terms. And if you were to convert that to a gold deposit analogy, that same value, this would be equivalent to an eight million ounce gold deposit at eight and a half grams of gold.
And our deposit is open-pittable at under two and a half to one stripping ratio. So this is very, very significant. You should watch this project as it develops.
Thank you very much Paul, and we'll have you on the show again soon.
Thank you very much.
The Next Bull Market Move
For more information on First Vanadium Corp go to https://www.firstvanadium.com
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