Mining and gambling are almost synonymous when it comes to developing a new property, but when the site is located in a foreign land and the company president admits he’s never even heard of the metal they’re after, the word ‘gamble’ could almost be replaced with ‘risky” or even worse, “foolish.”
In fact, when Largo Resources of Toronto decided to purchase the Maracas Vanadium Project in Bahia, Brazil, in 2006, Company President and CEO Mark Brennan said: “I was brought into Largo Resources in 2005 to help turn the company around. At the time, it had a copper-gold project in Ecuador known as the Macuchi Project. The asset had a reasonably sized resource, and looked interesting, but it just didn’t have the scope it would need to be economical.
“When I joined, we decided to launch one final drill program to see if we could “hit the mother-load,” so to speak, and following that, the company would make a decision on which direction to move forward – either continue with Macuchi, or find another asset. Needless to say, we shortly set out to look for a new asset to bring into Largo.
“We never set out looking for a vanadium project – in fact, back then, I had never even heard of vanadium before! But, our strategy in looking for projects was very firm: to look only at “best of breed” projects – or in other words, assets that were the top of their asset class. This required us to be completely agnostic to commodity, and looking only at projects where we could get the greatest return on capital.”
And now, more than eight years after making that decision, Brennan is convinced that Largo Resources is in an extremely unique position within the commodity itself, thanks to its Maracas Vanadium Project, located approximately 250km from Salvador.
“Hands-down,” says Brennan, “it’s one of the highest grade and quality vanadium deposits in the world. Our mineral reserve, which is averaging a grade of 1.3%, is two-times higher than any other deposit out there.”
We believe this makes the Maracas Vanadium Project a globally significant asset for vanadium.
Production of vanadium is currently dominated by three major regions: China, South Africa and Russia and in its history it has been plagued by supply disruptions which have caused its price to be extremely volatile when compared with other commodities. With a currently projected 29-year mine life, Brennan believes that the Maracas Vanadium Project will eventually become the key vanadium producer globally for its ability to provide consistent and high quality vanadium for a very long time.
But what exactly is vanadium?
Vanadium is a strategic metal primarily used as a strengthening alloy to steel. The vanadium argument is simple: small amounts of vanadium, added to steel, make it stronger, tougher and lighter. To give you an example, adding approximately 1kg of vanadium to one tonne of steel, can increase its strength up to 100% and reduce weight by 35%.
Vanadium-enhanced steels go into an extremely large range of products that we encounter or use every day. The list is long, and growing, but some of the most significant examples are:
Rebar used in the construction of buildings and infrastructure like bridges and tunnels. Vanadium not only imparts on rebar tensile strength, but also resistance to seismic events – it is a mandatory input in rebars in all developed economies like North America, Europe, Japan and is increasingly being used in rebar in emerging, or developing regions of the world. Particularly earthquake prone countries like China.
Likewise, vanadium also has anti-corrosive properties which make it ideal for steel products which see a lot of wear-and-tear, and are exposed to environmental effects like; railway lines, railway cars, power-pylons for energy, oil and gas platforms and refineries as well as pipelines.
Its strength-to-weight ratio (strongest strength to weight ratio of any engineering material) makes it the consummate alloy in steels for automobiles and aerospace applications.
Once again, Brennan believes that Largo’s Maracas Project, an area of 28,587 hectares hosting many deposits of vanadium-rich titaniferus magnetite mineralization, is well positioned to answer to the world’s demand for accessible and long-term access to vanadium thanks to its average annual production estimated at 11,400 tonnes.