Today we’ve dug up some Canadian vanadium stocks that could benefit from increasing vanadium demand
SmallCapPower | October 31, 2018: Vanadium is an element used primarily to strengthen steel alloys for industrial use but also has important applications as a battery metal. Vanadium-based batteries are known to have longer lifetimes, lower heat levels, and limited risk of combustion when compared to lithium-ion batteries. The price of vanadium has dramatically outperformed other metals since January 2017, appreciating 346% compared to the gains of cobalt (89%), lithium (16%), copper (12%) and gold (2%). In February, the Standardization Administration of China (SAC) introduced new regulations to improve Chinese industrial steel standards, starting in November 2018. When we take into consideration that China produces 200 million Mt of rebar annually, this new development is expected to significantly increase the demand for vanadium and push prices even higher. Today, we have identified four Canadian vanadium stocks that will likely benefit most from an elevated level of vanadium demand. Note: All metrics reflect closing prices as at October 29, 2018.
Prophecy Development explores and develops minerals and energy products in Canada, the United States, Mongolia and Bolivia. The Company owns 100% interest in the Gibellini project, a large open-pit in Nevada that has the largest Indicated vanadium resource in the United States. A positive Preliminary Economic Assessment at Gibellini estimated average annual production of 9.65 million lbs. V2O5 and a life of mine of 13.5 years. In addition to vanadium, the Company owns 100% interest in the Ulaan Ovoo coal property located in Mongolia where it receives cash as part of a lease agreement.
- Market Cap: $42.3 Million
- 1-Month Total Return: 211.8%
- 1-Year Total Return: 15.2%
- Net Debt (Last 12 Months): -2.1 Million
- EBITDA (Last 12 Months): -3.4 Million
Largo Resources Ltd. (TSX:LGO) – $4.24
Diversified Metals and Mining – Vanadium
Largo Resources is a Canada-based pure vanadium producer operating the Maracas Menchen Mine in Bahia, Brazil. The Maracas Menchen mine is an open-pit mine that began production in August 2014, hosting 19.0Mt of 1.1% V2O5. The mine is guided to produce 9,150 – 10,150t of V2O5 in 2018, with an annual average cost guidance of $5.20/lb. V2O5. Over the next 12 months the Company will be expanding operations at the Maracas Menchen Mine to increase its production capacity by 25%.
- Market Cap: $2,220 Million
- 1-Month Total Return: 13.4%
- 1-Year Total Return: 410.8%
- Net Debt (Last 12 Months): 311.0 Million
- EBITDA (Last 12 Months): 191.0 Million
CellCube Energy Storage Systems aims to become North America’s first vertically-integrated producer of vanadium and vanadium electrolytes. CellCube has undertaken the acquisitions of Enerox, a vanadium redox battery manufacturer, and EnerCube Switchgear Systems, a designer and manufacturer of power control systems, to position itself to capitalize on the growing demand for vanadium batteries. The Company’s Bisoni-Rio property in Nevada spans 4,100 acres and contains pure vanadium deposits in carbonaceous shale.
- Market Cap: $47.9 Million
- 1-Month Total Return: 81.3%
- 1-Year Total Return: 0%
- Net Debt (Last 12 Months): -3.4 Million
- EBITDA (Last 12 Months): -1.9 Million
Energy Fuels Inc. (TSX:EFR) – $3.72
Diversified Metals and Mining – Vanadium
Energy Fuels is a U.S. based producer of uranium and vanadium assets. The Company’s White Mesa Mill in Utah is the only permitted and operational uranium/vanadium mill located in the United States. The Company’s La Sal mine has a Measured & Indicated vanadium resource of 32 Mlbs. The Company is expected to produce 4M lbs. V2O5 between 2018 and 2020 at the White Mesa Mill once production resumes in Q4/2018.
- Market Cap: $352.6 Million
- 1-Month Total Return: -10.4%
- 1-Year Total Return: 120.1%
- Net Debt (Last 12 Months): -24.3 Million
- EBITDA (Last 12 Months): -12.5 Million
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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