QEM Limited (ASX:QEM) Executive Director, David Fitch and General Manager Scott Drelincourt talk the company’s wholly-owned Julia Creek Vanadium and Oil Shale Project in North Western QLD, its drill program and IPO.
Jessica Amir: Hello I’m Jessica Amir for the Finance News Network. With me today is QEM Limited (ASX:QEM) Executive Director, David Fitch and Chief Geologist and General Manager, Scott Drelincourt. Gentlemen welcome.
David Fitch: Thank you Jessica for having us.
Jessica Amir: First up, just give us an introduction to QEM.
David Fitch: QEM was formed in 2014, by myself and two other shareholders that are still part of the team today. We’ve got three exploration tenements in the Julia Creek area. Julia Creek is located 280 kilometres east of Mt Isa, our three tenements are located within the Toolebuc Formation. This formation is regarded as one of the largest deposits for oil shale and vanadium in the world. Coupled with its amazing location in that Toolebuc Formation, we’ve put together a Board and management team comprising expert individuals. Scott, our General Manager and Chief Geologist, Daniel Harris, widely regarded as the world’s foremost expert on vanadium. And together, we’ve got a great opportunity to put this mine into production.
Jessica Amir: Now just tell me about the significance of vanadium and its price?
David Fitch: Vanadium has been around since the early 1900s, used in steel strengthening. It makes the steel lighter and stronger. China in the last few years have put requirements in place, to have vanadium added to strengthen their rebar. We’ve also seen the emergence of the vanadium redox flow batteries. That market in itself, the energy storage market, is running at 34 per cent increase growth year-on-year. Surprisingly at the moment, it only makes up four per cent of the market and in the past 18 months, we’ve seen the price increase of vanadium by over 300 per cent. This makes it a very attractive and a fantastic position for our company to be in, and we see the price continuing to grow. And we’re very excited and the team is very excited about moving the project forward.
Jessica Amir: Now to you Scott, let’s talk about the project. Just start by giving us an introduction.
Scott Drelincourt: We’ve got three exploration permits in the Julia Creek area, totalling 176 square kilometres. And all the tenements are located 16 kilometres from the township of Julia Creek. Now Julia Creek is a transport nexus hub. It’s got a corridor of the Flinders Highway and The Great Northern Railway, going through the northern part of the tenement, which also enables transport to the Port of Townsville.
Jessica Amir: What’s been done so far on the project?
Scott Drelincourt: So far on the project, in 2015 we did our initial exploration program, which resulted in a maiden JORC resource of 1.3 billion tonnes. Since then, we’ve currently upgraded our JORC resource in March 2018. Now we have a total of 1.7 billion tonnes in the JORC inferred category. We have 0.34 per cent vanadium content and oil of 589 million barrels, in the 3C category contingency.
Jessica Amir: What makes the project so unique?
Scott Drelincourt: What’s so unique about it is it’s very shallow, located next to the infrastructure. Dual commodities in there, both vanadium and the oil shale, which separates us from anyone else in the market. We’re the most advanced in the area. We’ve taken all the guesswork out by doing our drilling and the results to date, show we’ve got a feasible project.
Jessica Amir: So what’s planned?
Scott Drelincourt: Post IPO, we’ll be initiating our prefeasibility study in conjunction with our drilling campaign. Our drilling campaign will have geotechnical aspects to it, which will allow for mine layout designs. We’ll also do an infill drilling campaign, which will allow us to go from an inferred resource, to an indicated and measured category. Now that’ll also allow us to put a mine lease application down on the project area, after the drilling campaign.
Jessica Amir: Back to you David, to the IPO. How much are you looking to raise and just tell us where the funds will be going?
David Fitch: We’re looking for $5 million through the listing process. The offer will be at 20 cents per share, indicative market capitalisation on listing, will be in the order of $20 million. Offers close on the 10 September 2018 and we’re hopeful to be listed on the ASX, come the 20 September this year.
Jessica Amir: So if investors want to get involved, how can they?
David Fitch: People can go and visit our website, on the website you’ll see a link to the Prospectus. Or alternatively, you can contact our lead adviser, Stuart McClure at Vested Equities.
Jessica Amir: And lastly, why should investors get involved?
David Fitch: I’ve been associated with the company for the last five years. I’ve put my time and my money into this company and will continue to back it all the way. We’ve got a great team of management and management team have delivered projects, right through to production, previously. We know with the deficit in vanadium moving forward out to 2020, being approximately 20,000 tonnes, there was a real opportunity in this market for vanadium. And more importantly, with regards to the oil shortage crisis we currently face in this country, our by-product oil, from the same rock, makes us a very attractive investment.
Jessica Amir: David, Scott, thank you so much for your time and good luck with the IPO.
David Fitch: Thank you.
Scott Drelincourt: Thanks for having us.