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Vital Metals LTD (ASX: VML) Advances Watershed Scheelite Project in Queensland


Mark Strizek, Managing Director of Vital Metals LTD (ASX: VML), took some time to share with Metals News the most recent developments for his company with the Watershed tungsten deposit in Australia during a visit at the ITIA meeting.



Said Strizek, “I’m originally a geologist and I have been with Vital Metals for three years now. I like working in smaller companies. Here I have an opportunity to get across many fields. We are now able to do some interesting work. The tungsten industry is quite interesting. It is great to be able to come into a hotel and see all of the major players. We are looking forward to turning Watershed into a major player. We now are at the stage where we have a fully permitted project.”

A cornerstone of the project has been securing financing, which has been completed. Strizek said, “We have secured the investment from the Japanese government. Their role is to secure tungsten against demand. Japan has zero resources. We are hopeful that the Japanese investment means we can take it further. If you look at the projects that are moving forward, that is the key. Tungsten is a small industry so it can be hard for people to understand. For the end users, they have come to the realization they are going to have to be proactive. Without their investment, these projects won’t get off the ground. We are ready to go now. We have the funding so we could start building it tomorrow.”


Planned Watershed mine and processing plant

The company has also seen positive study results and potential. Said Strizek, “In terms of the project, we have key findings coming out of the study. There are some Australian companies that have used a similar ownership partnership to move their project forward. The key is the Japanese sponsor. When you look at the funding you see what we can do. In terms of the resource, we are in the top ten outside of China. It is a greenfield project that was discovered in the 1970’s. There is a mine life of 10 years with 70,000 tons of tungsten in the ground. There are additional targets within five kilometers of the mine.”



Strizek is anxious to get the project going. He said, “Once you get these projects started, that is the biggest hurdle. We are an Australian listed company. We were listed in 2005 with the purpose of developing Watershed. Our market cap is about ten million dollars.” Strizek believes there is a growing need for tungsten. He said, “Despite its importance to the Western economies, tungsten doesn’t always get the recognition it deserves. Inside Japan you have the majors, so you can kind of draw your conclusions as to who might be interested. We are excited to be able to deliver a DFS. We have a mining lease for twenty years and all four approvals are done. The local people are very supportive of the project. There are opportunities for training and employment. The Queensland government is very focused on supporting mining projects. We are seeing a rapid unwinding of costs on mining companies along with a realignment of the Australian dollar against the American dollar. We have also been able to get $500,000 dollars in support from a building company. They are interested in being able to build the project.”



The backing from financial sources and Sedgeman puts the company in a positive position, Strizek believes. He said, “You need to be able to assemble a team of strategic alignment. Sedgeman would like to build the project. We’d like to be able to pull together a funding package early next year and get off the ground. The resource is a vein swarm array. They are visible to the eye. Amongst that we have lower grade halos. There is visual control because of the colors of the rock. It is all scheelite and is very easy to liberate. Once you do your decontamination, it is an easy product to sell. We are working with x-ray transmission sorters. We have sorters up on the front, and then we are using traditional sorters and flotation for final clean up. We want to maximize recovery at all the stages. We are up to 70% recovery and we think we can get it up to 77%. Recovery is something you can control and we think we can improve what is already a very good recovery. We have a relatively fine grain with good liberation at 450 microns. That is where the advantage of an x-ray sorter has an advantage otherwise we’d have to look at milling a lot more tonnage.”



The project will start out as an open pit design, said Strizek, and then may move into an underground configuration in the future. He said, “This will start as an open cut. There are some great opportunities to take it underground. It becomes quite an exciting proposition to get it open up and then a couple years down the road to look at exploring underground. Once we understand the geology, we can take the next step. We are on a hillside so that makes horizontal development issues. A lot of the costs look like 200 an MTU. We think it is a competitive project and the payback is there as well. The industry is in an area where costs in China are going up. You can’t buy concentrate from China anyways. Industry is coming out of China because the costs are going up. We are sitting in a reasonable place. The project is economic and technically viable. We are well placed to weather any storms. We will be able to produce a marketable 65% or more concentrate. The product doesn’t have any deleterious elements in it. We have been able to secure Japanese investors and Sedgeman. When you start pulling that together, we are in a good proposition.”

http://vitalmetals.com.au/

64 Churchill Avenue

Subiaco
Western Australia 6008

Phone +61 8 9388 7742
Fax +61 8 9388 0804

Email vital@vitalmetals.com.au





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