Ferro-Alloy Posts Strong First Half; Fundraises For Feasibility Study

Ferro-Alloy Resources Ltd on Thursday reported strong interim growth, despite operational challenges, as it concluded an equity fundraise for feasibility studies.
The vanadium miner and processor has operations in Southern Kazakhstan at the Balasausqandiq mine.
In the first half of 2022, revenue was USD3.9 million, more than doubling year-on-year from USD1.5 million. “While materially ahead of last year, [revenue] has been impacted by the supply chain issues caused by the war in Ukraine and the after effects of Covid-19,” the miner said.
It expects revenue to be “significantly” larger in the second half compared to the first, but notes uncertainty as to whether these issues will continue to affect its performance.
Pretax loss was USD694,000, narrowed from USD1.1 million. This was down to the increased revenue, with administrative expenses climbing to USD1.2 million from USD849,000.
Production levels increased 95% year-on-year to 172.2 tonnes of vanadium pentoxide, compared to 88.2 tonnes. It was constrained by raw material and reagent supply issues at times, but performed well otherwise. Its capacity is much greater than current output, the company noted.
The miner launched a GBP8.6 million fundraise for the ongoing feasibility study on phase 1 and 2 of the Balasausqandiq project. This entailed a placing of 64.0 million new shares to raise GBP7.7 million, and subscription of 4.4 million shares to raise GBP500,000. It also launched a PrimaryBid offer for up to GBP400,000.
The issue price of 12.0 pence was an 18% discount to the closing price on Wednesday.
Shares in Ferro-Alloy were down 14% to 12.57p each in London on Thursday afternoon.
“The early results of the expanded feasibility study are confirming the potential for Balasausqandiq to become a globally significant vanadium operation. Installations around the world of vanadium flow batteries are increasing, which is perhaps the basis for vanadium prices remaining strong compared with historic levels,” said Non-Executive Chair Mick Davis.
“I expect to see significant progress and results in the coming months, particularly when the geopolitical headwinds begin to ease,” he added.
Towards the end of 2022, it expects annualised production to reach its target of 1,500 tonnes. At current prices this would be around USD2 million in revenue each month over 2023.