This Jangada is sailing onwards and upwards
“…With the positive news continuing we believe that Jangada is one of this year’s mining stocks to look out for…”
Selected last month as one of our small cap mining stocks to watch in 2021 Jangada Mines (AIM:JAN) has moved strongly into the new year.
Led by Executive Chairman Brian McMaster, founder of the Australian-listed potassium company Highfield Resources (ASX:HFR), Jangada’s primary interest is its fully-owned licence at Pitombeiras, some 300 kilometres inland from the port city of Fortaleza in north-eastern Brazil, where it is exploring a three kilometre structural trend with an original JORC estimate of between 40 to 60 million tonnes of vanadium, titanium and iron.
The working capital requirement for exploration of the 1,093 hectares field is supported by Jangada’s 17.68pc interest in ValOre Metals Corp (TSX‐V:VO), a Canadian company pursuing a palladium, platinum and nickel project at Pedra Branca, also in north-eastern Brazil, with a National Instrument (NI) 43-101 compliant inferred resource of 1,067,000 ounces PGE+Au (platinum group elements and gold) at an average grade of 1.22 g/t PGE+Au,
ValOre also holds Canada’s highest-grade uranium resource outside of Saskatchewan, and one of the highest-grade uranium resources on a global basis. The 105,280-hectare Angilak Property in Nunavut Territory, hosts the Lac 50 Trend with a NI 43-101 Inferred Resource of 2,831,000 tonnes grading 0.69% U3O8, totalling 43.3 million pounds U3O8.
ValOre has invested over C$55 million in the Angilak Property since the acquisition on exploration, logistics, studies, and resource delineation work. Discovery potential at Angilak is significant, providing excellent potential to add value with an upward move in uranium prices.
Serving the growing redox flow batteries market
Work so far at Pitombeiras indicates highly promising concentrations of vanadium and titanium. Vanadium has traditionally been used to strengthen steel, but is emerging as a key resource for the energy transition due to its use in redox flow batteries, which offer the revolutionary promise of electricity grids wholly powered by means of non-carbon energy sources, allowing surplus power generated by solar and wind to be stored when the sun is shining and the wind blowing, and released when the clouds roll over and the air is still.
Pioneered by Nasa in the 1970s, flow batteries store energy in tanks of liquid electrolyte – usually derived from vanadium – which is then pumped through a stack of cells, causing an electrochemical reaction that generates electricity. These huge batteries open the prospect of electricity grids wholly powered by renewables, removing the need to rely on gas-fired power plants to provide back-up when solar and wind are not available.
Vanadium’s very long life makes flow batteries better suited for heavy-duty use in grids than better known lithium-ion batteries, familiar from their use in mobile phones and electric vehicles. Even the most powerful lithium-ion batteries can only store energy for a few hours at most, whereas vanadium batteries can perform reliably for decades. Electrolyte made from the metal can reliably charge and discharge for thousands of cycles without degrading, ensuring they can be relied on to store sufficient reserves of energy to keep power grids running.
Flow batteries can also provide the backbone for standalone energy systems in regions or countries with poorly developed energy infrastructures. In Africa for example flow batteries hooked up to solar panels are already helping provide green power for communities and factories without access to a grid.
It all makes for a huge potential market. As the technology improves the price of flow batteries is falling – according to Wood Mackenzie costs fall some 5 to 8pc every time battery production doubles. And a report from Markets and Markets predicts that the value of the flow battery market, less than $200m in 2017, could touch $1bn by 2023, a compound annual growth rate of more than 30pc.
Mainstream adoption will depend on continued investment in renewables and securing reliable supply chains for vanadium. Here in the UK their potential is gradually being recognised. Last year the Government made it easier for companies to get new energy storage projects off the ground, allowing them to apply for planning permission through local planning authorities rather than the labyrinthine national planning system. And Britain’s first major battery storage programme is well underway, the Energy Superhub at Oxford, which uses a 50-megawatt hybrid Lithium-ion/vanadium flow battery system to regulate the supply of power in accordance with demand. The installation is one of several major global battery flow projects, the largest being the 800-megawatt storage facility under construction in Dalian, China.
The supply of two-thirds of vanadium currently depends on steel slag sourced in China. Jangada is hoping to join luminaries such as Bushveld Minerals, Glencore and Largo Resources, which are all expanding their vanadium production, to widen global supply channels.
Progress through 2020
Jangada’s promising progress at Pitombeiras through 2020 has been mirrored by its share price, which rose from just over 3p in mid-October to 5p a month later, breaking out to more than 7p earlier this month, taking the company’s market cap to £17.9m.
The Pitombeiras programme is designed to evaluate vanadium titanomagnetite (VTM) mineralisation over a structural trend at three targets, Pitombeiras North and South, and Goela. Airborne magnetic surveys were used to delineate drilling targets, allowing the initial programme – completed for a total of 1,360.80 metres at 19 drillholes – to return a NI 43-101 compliant resource estimate for 5.70Mt million tonnes at an average grade of 0.51pc vanadium pentoxide (V2O5), 10.09pc titanium dioxide (TiO2) and 50.42pc of ferric oxide (Fe2O3) for a contained resource of 28,990 tonnes V2O5. Broken down, the estimate states an Indicated Resource of 1.47 million tonnes at an average grade of 0.50pc V2O5, 9.85pc TiO2 and 49.78pc of Fe2O3 for a contained resource of 7,297 tonnes V2O5, and an Inferred Resource of 4.23 million tonnes at an average of 0.51pc V2O5, 10.17pc TiO2 and 50.64pc of Fe2O3 for a contained resource of 21,693 tonnes V2O5.
Though Pitombeiras is most often associated with its high grade vanadium prospect, the field’s titanium (TiO2) grades should not be overlooked and Jangada’s 33pc bear very favourably on industry peer comparison and with those recorded by leading vanadium titanomagnetite miner Largo Resources (TSE:LGO) at its Brazilian flagship Maracás Menchen mine. In an interview last March Largo CEO Paulo Misk stressed the importance of the company’s 13pc in titanium (Ti02) tailings as a second revenue stream. Demand for TiO2, which has aviation, industrial, medical and other uses is forecast to increase at a CAGR of 3.6pc over the next three years, reaching a value of $5530m by 2024.
The results encouraged Jangada to proceed with a programme to drill a further 2,000 metres, which has so far intersected VTM mineralisation at eight holes completed for a total of 649.15 linear metres. Results published on 25 January included a recording for 21.50 metres of 0.55pc V2O5, 9.81pc TiO2 and 50.39pc ferric oxide Fe2O3, including 7.00 metres at 0.66pc V2O5, 12.17pc TiO2 and 60.59pc Fe2O3. Additional results are due in ‘early 2021’.
In November a ground magnetic survey identified a further 12 targets at a new target area, Mocidade, located three kilometres north of the Pitombeiras North and Goela targets, indicating that the VTM system may extend across the wider project area.
Jangada’s exploratory work will inform a Preliminary Economic Assessment (PEA) report for Pitombeiras, which will identify the most suitable buyers for the project’s resources. Routes to market initially identified include Brazil’s Companhia Siderurgica de Pecém refinery and two major Chinese ports.
Another 2020 initiative saw Jangada invest in Fodere Titanium Limited, a UK registered clean technology company, which has developed a new and innovative commercial process for the titanium, vanadium, iron and steel industries, the Disruptive and Game changing technology is able to extract value from a wide variety of feedstocks including tailings, derived from the iron, steel and vanadium industries.
Fodere has secured capital to begin building its first industrial production facility at Witbank, South Africa, with a capacity of more than 22,000 tonnes.
ValOre, the Canadian company in which Jangada is invested, has also reported good progress over the past year at Pedra Branca, where a 6,000 metre two phase diamond drill programme has revealed an ore body that thickens at depth with mineralisation open from all directions. Assay results for Santo Amaro, one of five defined PGE deposit areas at Pedra Branca, published on 15 January, found near surface PGE mineralisation in eleven of 12 core drill holes and a new, near-surface PGE-bearing zone just off the main resource area.
ValOre hopes to serve a dynamic palladium market: the price of the silver-white metal used in catalytic converters to limit the emissions of petrol-burning cars has soared 270pc over the past five years as carmakers in Europe and China work to meet tougher emissions standards.
The year ahead
Jangada seems well positioned for a strong 2021. Supported by its stake in ValOre the company is fully funded to complete all the drilling at Pitombeiras, along all other key aspects of the upcoming Preliminary Economic Assessment, including additional metallurgical tests, logistics and marketing studies that are necessary to file its PEA report and are therefore well placed to take advantage of this, as they advance their key work streams during the year ahead, to further position the Company to make the transition from developer to producer.
In August the company raised CAD$1,750,000 through the sale of seven million ValOre shares. As of September last yearJangada’s interest in ValOre was worth CAD$4.9m, and the company had cash reserves of US$912,441 with total liquidity of ₤3.9m.
With the positive news continuing this year we confirm our assessment that Jangada is one of this year’s mining stocks to look out for.