Our 7mth 500% Gain on First Vanadium Fueled Only in Part by Global Vanadium Supply Crisis

vanadium
First Vanadium (FVAN: TSXV $1.70 / CCCCF: OTCQX) – Name change from Cornerstone Metals (CCC)

We now have a 500% gain on FVAN since coverage was started in February 2018, but this story is really only getting started as few outside of myself and and Eric Muschinski with Gold Investment Letter in New York have been covering the company in 2018.

 

As I mentioned to MicroCap.com subscribers last week, the name change will definitely help as more investors searching for vanadium exposure will be able to find the company.

 

Monday was a good example of this. With no material developments, over half a million dollars worth of buying came in. We are now beginning to get broader based recognition and even larger investors are approaching Paul (CEO) asking if he is interested in raising money at these levels. A very encouraging sign.

 

On the website this morning you will  find a drilling status update (saying they completed 69 holes vs 40 initially planned) and results will start rolling in soon. But more important, there are a series of five videos on the home page that offer a “virtual tour” of the project. They are VERY useful.

 

VANADIUM – SEVERE SUPPLY CRUNCH

 

On September 30th, Vanadium Pentoxide (V205) prices in Europe were being quoted at $22 to $23 US/lb. This is a VERY high number as our previous project modelling used $14/lb and we were showing extremely high project economics.

 

I use a mainland China based service that is extremely reputable for Vanadium price quotes – keep in mind that 80% of V205 production originates in China or Russia. And traders in China Sept 30th and Oct 1st were posting ridiculously high prices for V205 – in the range of $30 US/lb.

 

There is a national holiday that runs all this week in China and I suspect this incredible volatility is purely a factor of the holiday. Both traders and suppliers are obviously not posting / quoting properly. But something very important comes from this….

 

The market is incredibly tight. Likely this is a factor of the new rebar standards coming into effect November 1st in China. And consider this one event alone….

 

https://www.euronews.com/2018/09/19/chinas-subway-splurge-could-help-its-steel-sector-get-back-on-track

 

“The three cities’ subway plans will require about 80 million tonnes of the commodity, 10 percent of China’s annual demand, according to Reuters calculations based on industry standards for subway design, although that will be spread over a few years.”

 

Imagine the volume of steel and rebar that is required for this project – and this is only the tip of the iceberg. Check the stories we are tracking at www.VanadiumNews.com – the ongoing demand for vanadium in steel, rebar and energy storage will be huge.

rebar russia china

 

It is hard to avoid sounding “promotional” with FVAN and vanadium, but this is a fascinating situation that doesn’t come around often – and it justifies why I remain focused on First Vanadium.

 

If the processing works out to be positive (we will know this winter as Sherritt Labs continues to work on the flow-sheet and costing), then this has the potential to be an extremely profitable mine and our valuation from this level could grow dramatically.

 

Here is what I received from our contact in China who deals with commodity (vanadium) traders within China. I asked her what happened with the price recently.

 

Right now in China the full market is short of supply. Some buyers are looking to import vanadium from outside China. And even European suppliers such as EVRAZ also do not have anymore supply for exporting – so the quote price in China jumped again.

 

And Last Saturday one of my clients who has V2O5 in Rotterdam quoted 25 USD/LB V2O5 CIF China, after adding 5% customs duties and 16% VAT equal to around 450,000 RMB/ton, but that moment in China the spot transaction price is just like 380,000 RMB/ton.

 

And some special grade like V2O5 flake or powder(V≥98.5% fe<0.05% si<0.05% mo<0.04% cr<0.04) is around 420,000 RMB/ton.

 

And also Vanadium price jumped a lot, some steel groups also want to import from outside China, but after the tax, the import price has no advantage.

 

This full week is for China National Holidays, so there will be no updating price from Chinese companies. Let’s see what will happen after this week!