Ferro-Alloy Resources (LON:FAR) has taken a decisive step forward in its development strategy with the successful completion of the Phase 1 Feasibility Study for its Balasausqandiq Vanadium Project. The project, located in Kazakhstan, is set to become a key contributor to the global vanadium market, backed by low production costs and significant expansion opportunities.
According to a detailed report by Panmure Liberum, the study confirms a 20-year mine life with a planned annual output of 8.5kt of V2O5 and 247kt of carbon black substitute (CBS). Impressively, over 40% of the revenue from the project is expected to be generated from CBS sales, highlighting the dual-revenue potential of the operation.
Pre-production capital expenditure stands at US$564 million, but net funding requirements reduce to US$520 million after accounting for US$44 million in pre-production income. Importantly, cash costs are estimated at US$4.35/lb of V2O5 equivalent, placing FAR among the lowest cost producers globally. The project has also delivered a post-tax Net Present Value (NPV8%) of US$748 million and an Internal Rate of Return (IRR) of 22%, based on independent price forecasts.
In the words of Duncan Hay, Research Analyst at Panmure Liberum, “The feasibility study for Phase 1 of the Balasausqandiq Project estimates a post-tax NPV of US$748m, using a discount rate of 8% – this is low vs PL’s 12% – and V2O5 prices of US$8.02/lb in 2029, increasing to US$10.59/lb from 2037.”
Beyond the feasibility results, there are clear optimisation opportunities identified. FAR’s pilot plant has shown better vanadium recoveries and lower reagent use than originally modelled. Additionally, a potential second CBS product from tailings, excluded from the current feasibility scope, could offer meaningful upside to revenues with minimal additional capital required.
With an offtake term sheet already in place with Austria’s LL-Resources for up to 100% of Phase 1 vanadium output, and Chinese engineering firm CC6 lined up for project optimisation and development, FAR is proactively paving the path to production.
The feasibility study was led by SRK Kazakhstan, with metallurgical support from Tetra Tech and pricing inputs from CRU and Smithers. Importantly, FAR Chairman and Vision Blue Resources’ Sir Mick Davis reinforced the project’s investment appeal, noting: “The positive results of the Feasibility Study show that Balasausqandiq has the potential to be the lowest cost primary vanadium producer in the world with a cash operating cost of US$0.36/lb net of by-products.”
Financial and Operational Highlights
- 20-year mine life based on a single ore body (of seven)
- 1.65mtpa plant throughput
- Production of 8.5ktpa V2O5 and 247ktpa CBS
- Cash costs: US$4.35/lb V2O5 eq., or just US$0.36/lb net of by-products
- Post-tax NPV (8%): US$748 million
- Post-tax IRR: 22%
- Pre-production capex: US$564 million (including US$73.5 million contingency)
- Vanadium price forecast: US$8.67/lb in 2029, rising to US$10.59/lb by 2037
- CBS price assumption: US$500/t
On a Final Note
Ferro-Alloy Resources continues to make confident strides toward becoming a major player in the strategic vanadium market. With competitive production costs, diversified revenue streams and significant scalability, the project stands as a strong contender in the global push for critical minerals. Backed by visionary leadership and robust technical foundations, FAR’s development is one to watch closely.
