Ferro-Alloy Resources First Sale of Ferro-Molybdenum

Ferro-Alloy Resources, a developer of the large Balasausqandiq vanadium mine in southern Kazakhstan, recently announced that it has achieved its first commercial sale of ferro-molybdenum and has completed production testing of ferro-vanadium.

The company has begun converting its calcium molybdate products into higher-value ferromolybdenum. FAR is now pleased to announce that its first commercial sales contract has been signed.

The company is now recovering approximately 4.5 tons of ferro-molybdenum per month from bought-in concentrates as a by-product, and this is expected to grow as plant throughput increases. Molybdenum was initially recovered as calcium molybdate, which was previously sold at a lower price than the prevailing molybdenum price, but is now being converted to ferro-molybdenum for sale, avoiding a discount.

In addition, the company also announces that testing to produce ferrovanadium using a process similar to ferromolybdenum has been successfully completed, enabling the Company to choose in the future whether to sell its vanadium production as vanadium pentoxide or ferrovanadium, depending on which is most profitable given pricing and costs.

Ferro-vanadium typically sells for US$3-4/kg more than the same quantity of V₂O₅, broadly reflecting conversion costs, but the ability to manufacture ferrovanadium opens up a wider range of customers, particularly in Kazakhstan, which minimises transport costs and provides other financial advantages.

The full range of products now available for sale from Ferro-Alloy Resources includes. Ammonium Metavanadate (AMV), Vanadium Pentoxide, Ferro Vanadium, Ferromolybdenum, and Nickel Concentrate, Nick Bridgen, CEO of Ferro Alloy Resources, commented, "These are two important steps towards realizing the maximum value from our exiting business and further demonstrating our growing technical expertise."

"With vanadium prices at relatively high and stable levels and our growing production, our existing operations are now achieving their goal of providing the cash flow to support our feasibility study and the continued development of the Balasausqandiq deposit."

The Company's operations are all located at the Balasausqandiq deposit in Kyzylordinskaya Oblast in southern Kazakhstan. Currently, the Company has two main business activities: one is the high grade Balasausqandiq vanadium project and the other is the existing vanadium concentrate processing operation. Balasausqandiq is a very large deposit where vanadium is the main product with some by-products. Due to the nature of the ore, the capital and operating costs of development are much lower than other vanadium projects.

On the basis of JORC 2012, reserves were estimated only for the first ore body (five) in the amount of 23 million tons, excluding a small amount of near-surface oxide material that falls within the inferred resource category. In the reserve estimation system used in Kazakhstan, the reserves of ore bodies 1 to 5 are estimated at more than 70 million tons, but this does not include the full depth of ore bodies 2 to 5.

There is an existing concentrate processing operation at the site of the Balasausqandiq deposit. The production facility was initially created from a pilot plant with a capacity of 15,000 tonnes per year, which was then adapted to process concentrates and expanded. Further expansion is currently underway and is expected to result in a production capacity of approximately 1,500 tonnes per annum of vanadium pentoxide and a significant amount of by-product molybdenum.

Ferro-Alloy Resources' strategy is to develop this project and its existing operations in parallel. Although they are located in the same location and use some of the same infrastructure, they are separate operations.