Ferro-Alloy Resources plc (LON:FAR) Chief Executive Officer Nick Bridgen caught up with DirectorsTalk for an exclusive interview to discuss increased production figures, how this fits in with the wider context of the business and what’s to come in the rest of the year.
Q1: Production figures for the first half of 2023 now published which show a significant increase in all products, what’s been driving this increase?
A1: This is really the fruition of the big programme that we’ve been undergoing for the last year or so, where we’ve increased the capacity and, probably more importantly, we’ve increased the recovery of all the different contents of the materials that we buy in.
Just to repeat what’s in the announcement, tonnes processed are 95% up on the average, I’m talking about the last quarter, not the whole year so April-June quarter, 95% up in tonnes processed, 85% up in v205 recovered, that’s vanadium pentoxide and molybdenum up 57%. So, yes, we’re delighted really that the hard work we’ve put in and the investment is starting to pay dividends.
The quarter wasn’t without problems, we’ve signed a lot more contracts for buying in these concentrates so a lot of them were disrupted by COVID and Ukraine and we’ve had shortages.
So, we signed a lot more contracts and, in that quarter, they were starting to come in but not fully so there is more good news to come, I hope and we’re expecting to have the full amount that we need from August onwards. So, things should be good.
Q2: How does this fit into the wider context of Ferro-Alloy Resources’ business?
A2: The biggest part by far, of course, is our project, the Balasausqandiq project, which accounts for about 96% of our projected NPV.
This small project is important for financial and non-financial reasons but not part of the big picture, obviously it’s what feeds us, it should make decent profit that will pay for the ongoing work that we have now. It also gives us 300 employees who are ready to help with the feasibility study, help with the construction and a team of people who know what they’re doing, ready for commissioning of the big project.
The big event at the moment is the feasibility study for the project which should be done by the end of thus year, and that will let us move into financing and start of construction next year.
Q3: What’s the prognosis for the rest of this year?
A3: Like I said, there’s probably more good news to come because although we’ve been signing these new contracts, as they come to fruition, we’ll get more concentrates in, we’ll be able to use our production capacity better in the second half of the year.
We’re expecting really a good second half for the existing production and, as I said, the feasibility study of the main project coming in this year too. Somewhere along the line, we’ll get the results of the exploration of ore bodies two to four which will actually feed into phase II of our development plan but that also should be a significant event.
So, a good interesting second half year to look forward to for Ferro-Alloy Resources.
