Date:May 30, 2018

It’s taken a while for investors to realise the potential of vanadium in the battery metals race, but interest is starting to pick up.

The price of vanadium has rocketed 550 per cent in the past three years, outpacing other commodities, including the rival battery metals lithium and cobalt.

There are 35 small cap ASX stocks with exposure to vanadium according to resources data provider MakCorp.

Of these, 27 are ahead over the past 12 months — including King River Copper which is up 1440 per cent. Another half a dozen have made gains of 100 per cent to 384 per cent.

About 90 per cent of global vanadium production is used to make high-strength steel, but future demand stems from its role in vanadium redox flow batteries (VRB), which can store more power and last much longer than lithium-ion batteries.

This makes it highly sought after for industrial and domestic energy storage, though it’s unlikely to be used in electric car batteries.

Chalice Gold enters vanadium market

Chalice Gold Mines (ASX:CHN) is the latest to put its foot on vanadium ground in Australia.

As a gold player, Chalice’s share price has tumbled 44 per cent since October last year.

But the company announced last week it has applied for exploration licences prospective for vanadium and nickel in Queensland and Western Australia.

Chalice executive chairman Tim Goyder told Stockhead investor interest was definitely starting to be realised in the vanadium space.

“Vanadium flow batteries are here to stay, like the lithium batteries are,” he said on the sidelines of the Resources Rising Stars conference in Queensland’s Gold Coast.

The only pure-play producers of vanadium are Toronto’s Largo Resources, which processes 1.4 million tonnes each year from its Vanadio de Maracás Menchen mine in Brazil, and Bushveld Minerals, which processes 2 million tonnes from the Vametco operations in South Africa.

Largo is now a $1 billion producer, while Bushveld has gone from a market cap of £20 million ($35.4 million) to roughly £250 million in just one year.

Chalice is looking for vanadium hosted in shale rather than the more common magnetite-hosted vanadium because it is much easier to mine.

“Historically around Richmond is the old Julia Creek area – the scene of a lot of work done during the oil crisis for oil shales,” Mr Goyder explained.

“Since then the oil market collapsed and in recent times the vanadium price has risen.

“It’s tripled over the last 12 months from $US6 ($8) a pound to over $US19 a pound, so vanadium is very much in demand, particularly shale-hosted vanadium.”

Chalice’s Flinders River vanadium project in Queensland surrounds the 2.6 billion tonne shale-hosted Richmond vanadium project owned by Intermin Resources (ASX:IRC).

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