KEY POINTS

* Coates Vanadium deposit is situated approximately 35km east of Perth in the Shire of Northam near Wundowie.
* Surface sampling in 2018 and 2019 confirms significant vanadium content with values up to 1.59% V2O5.
* Programme of Works application for exploration drilling over the Coates Vanadium deposit approved.
* Up to 15 diamond core holes to be drilled to obtain samples for geological modelling and metallurgical testwork.

Australian Vanadium Limited (ASX:AVL, “the Company” or AVL”) is pleased to announce that its recent application for a Programme of Works (PoW) on E70/4924-I over the Coates vanadium deposit, has been approved by the Western Australian Department of Mines, Industry Regulation and Safety.

The application is for drilling up to 15 diamond core holes at the Coates deposit, concentrating on the Vacant Crown Land (VCL) portion of the tenement. The intention is to prepare the diamond drill cores at a laboratory in Perth and then ship them to Montreal for metallurgical testing.

The Coates deposit is situated in the Shire of Northam approximately 35km east of Perth. AVL has signed a joint venture agreement with private company Ultra Power Systems (UPS), to develop the deposit.

Under the terms of the joint venture agreement UPS will spend $50,000 on exploration on the tenement within the first 12 months of the agreement and $150,000 during the first 24 months.

The drill programme intends to determine the deposit’s suitability as a low-cost feed for a full commercial scale processing plant which UPS proposes to build in Kwinana, Western Australia. The drilling will also enable a resource estimation of the Coates mineralisation to JORC standards to be produced by the AVL/UPS joint venture in 2020.

The VCL area is easily accessed and minimal clearing is required for the drill programme, much of which is on existing tracks.

The exploration Diamond drilling will use PQ or HQ core and it will therefore be possible to obtain enough bulk sample for metallurgical testing. The drilling of vertical holes and larger diameter core will ensure good sample recoveries in the laterite cap-rock, as well as the weathered gabbro.

The geology of the Coates deposit is unique and shows that vanadiferous magnetite is developed from the weathering profile of an underlying gabbro in a laterite outcrop on a ridge. The Coates vanadium deposit occurs in magnetite lenses at the core of the layered Coates Gabbro. The gabbro is poorly exposed in an area of extensive laterite formation, but appears to be between two granitic bodies. The Coates Gabbro is about 1km long and up to 600m wide.

CONCLUSIONS FROM SAMPLING

* The latest results corroborate those samples previously taken and the historical data.
* The open pit material (and potentially the resource area) shows good vanadium grades. For C9, C10, U1 and U2 the average grade is 1.15% V2O5.
* Variability of vanadium grade in the historical pit area ranges from 0.74% to 1.58% V2O5 from 4 samples, suggesting that all material is well above a mineable cutoff grade for most vanadium deposits (which is about 0.4% V2O5).
* The crushed fines dump previously sampled at 0.26% V2O5 (C6) and recently at 0.23% V2O5 (U3) confirms potentially recoverable and accessible low-grade material.
* Titanium values range from 8.75% to above 20% in previous samples and 5.13% to 9.71%
TiO2 in the latest samples. This underlines the value of titanium in this orebody.
* Aluminium is consistently high in all samples at over 20% suggesting that it is a true bauxite and source of aluminium.
* Historical dumps and pits look as if they contain sufficient material for significant resources of vanadium, titanium and other elements.
* The laterite cap-rock samples represent a good source of vanadium, titanium, iron and aluminium.

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