QEM (ASX:QEM) - vanadium and oil shale developer, Julia Creek, QLD


by Rachael Jones

QEM Limited (ASX:QEM) Managing Director, Gavin Loyden provides an update on the company's flagship Julia Creek vanadium and oil shale project in North Western Queensland, including work on the optimal processing route and the appointment of UK-based engineering consultancy GSA Environmental Limited (GSAe) to conduct vanadium extraction test work on Julia Creek shale.

Rachel Jones:
Hello. I'm Rachael Jones for the Finance News Network. Joining me from QEM is Managing Director Gavin Loyden. Gavin, welcome to FNN.

Gavin Loyden: Hi, Rachael. Thanks for the invite. I really appreciate the opportunity to discuss QEM with your listeners today.

Rachael Jones: Now first up, Gavin, can you start by giving us an introduction to the company?

Gavin Loyden: Sure. Well, QEM is developing a project in North West Queensland called the Julia Creek vanadium and oil shale project. As the name may suggest, it's a dual commodity play that we've got out there. We began this journey back in 2014 with the techno-economic study that led us to our initial drilling campaign in 2015. We then went on to complete a scoping study for vanadium itself without the oil. But we found that through our studies and through our research, the oil was going to be a necessary component of this project, and as it turns out, quite a crucial one, given that we're pretty much out of transport fuels here in Australia at the moment, importing almost 93% at the moment and probably considerably more in the near future.

Rachael Jones: Thanks, Gavin. And for our viewers that don't know, could you remind us about the uses for vanadium, and what drives prices?

Gavin Loyden: Yeah, sure. Well, vanadium is a very versatile metal, transitional metal. Your listeners are probably aware that most of that goes into the steel industry currently; over about 90% of that going into the steel, but it also goes into all sorts of things that you'd see in everyday life, from ceramics through dyes, through to sulfuric acid catalysts, and catalyst for the oil industry, as well as new uses now for smart glass. Really, that's where the interest is, and it's growing very, very strongly in the market today. That's having an effect on pricing. Nations worldwide are looking to expand on these new economies, and that's why vanadium particularly has been designated a critical mineral. It's regarded as a critical mineral, both by the US, the Australian, and now the European governments because we have to have it. And there's just not enough supply worldwide. The Chinese are consuming as much as they're producing; if not, a little bit more, which means as the rest of us come out of the COVID scenario, we're going to need a great deal more. That's without thinking about the battery sector.

Rachael Jones: Thanks, Gavin. Now, let's talk about your flagship Julia Creek vanadium and oil shale project. Can you tell us more about that, starting with the size of the resource?

Gavin Loyden: it's a globally significant resource. Now, it was one of the world's largest. In fact, it is the largest, continuous resource, so in one continuous project area rather than being isolated pockets of material.

Rachel Jones: And what has been taking place there?

Gavin Loyden: The last 12 months, we've focused primarily on developing a process for this unique resource. Given that we are chasing the two commodities, it's almost in essence two projects in the one, they're not going to be fully integrated, which gives us the flexibility to run both of those commodities independently of each other. Our focus has been really on the optimum processing route. We've probably been through every possible scenario globally as far as the oil processing side of it is concerned, and we're pretty comfortable where we sit at the moment and the direction that we're taking. We're doing a little bit more work on the vanadium side. We have had 90% extraction efficiency to using an acid leaching process. We think we can do a little bit better. At the moment, we're talking to GSA in the UK. They have a proprietary method for this, and they work within that oil space as well as the metal space, so they're a pretty good fit for us at the moment. We've looked at a number of scenarios. They work.

Rachel Jones: And what can you tell me about the progress toward your pre-feasibility study?

Gavin Loyden: Well, as I mentioned, those factors will now factor into the PFS. We understand the resource fairly well. We understand oil extraction fairly well. There's a few nuances to the vanadium extraction that we're trying to optimize at the moment; not a couple of months work there, and that will lead us then through to pre-feasibility. Hopefully, we'll have that well underway by the end of this year.

Rachel Jones: Thanks, Gavin. Now, let's talk about your finances and your share price. Could you provide us with a snapshot?

Gavin Loyden: When companies are in this sort of research and development phase, there is a bit of a tracking sideways on share pricing, and we're not unique in that sense that we've experienced the same thing. But I think we'd have to suggest that we're fairly undervalued in the market today, given the size of the resource, and we are getting closer to the answers that were required to lead into the development of the project.

Rachael Jones: Last question there, Gavin, is there anything else you'd like to add?

Gavin Loyden: Well, again, just touching on the opportunity that the QEM is a holistic investment. I think on any metric, we have a pretty good value in today's market compared to our competitors. We’re not wholly comparable to, say, the magnetite projects in Western Australia. But nevertheless, we think we sit pretty well in the market, and there's a plenty of upside from where we sit today. We've got a large-scale, dual opportunity here. The commodities that we're looking to produce are not really discretionary items. There's a distinct need for them, particularly in Australia at the moment as fuel security becomes such an issue. As I said, we're importing almost all of our transport fuels at the moment including diesel which is where our focus will be, and of course, vanadium pentoxide for the new economy.

Rachael Jones: Gavin Loyden, thanks for the update today. I look forward to hearing from you as your pre-feasibility study progresses.

Gavin Loyden: Thanks, Rachel. I look forward to be able to give you some further updates as we move forward.


Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.