By Cyrus S Darabshaw Exclusive To Vanadium Investing News

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After prices of vanadium and its alloys stabilised between the last week of January and the first week of February, the second week of this month saw ferrovanadium prices firming up on demand pickup. Traders said ferrovanadium demand has been a bit higher than expected leading to a small run of spot buying this week.

Ferrovanadium was trading between $12.50 to $13 per pound from $12.25 to $12.75 previously, on the back of improved steel mill buying, while vanadium pentoxide remained range bound between $7 and $7.50 per pound.  Coming on the back of a healthy correction from its huge January gains, this has brought some kind of cheer to the vanadium market.

The slide in metals was ignited by China’s announcement on January 13, 2010 that it would tighten the banks’ reserve requirements by half of a percentage point which is perceived as a sign of further monetary tightening creating fear that the Chinese economy will slow further cutting off global recovery.

Speaking of China, the MCC Overseas Ltd has struck a deal with Aurox Resources Ltd that promises to cut $233 million from the project development costs of junior explorer Balla Balla. Aurox has signed an agreement with MCC for providing engineering, procurement and construction (EPC) services, and financing assistance for the first two phases of the $2 billion iron ore, vanadium and titanium project in Western Australia.

According to the proposal by MCC, China’s leading mining engineering services provider, the project could be developed for $1.76 billion. Under the deal, MCC must procure finance to be eligible to provide the EPC services. Aurox said in a statement last Monday that a Chinese banking institution had provided it with a “formal indication of interest”.

Last week, for a change, it was not the Chinese who dominated the information sphere in the world of vanadium. A wide range of vanadium news was reported from various spots across the globe.

Mining and exploration company NiPlats Australia (ASX: NIP) has received further support for the potential of Speewah to host Australia’s largest vanadium deposit after returning the latest platinum, palladium and gold assay results.

The results came from the Reverse Circulation drilling programme on the Speewah Project, located in the Kimberley of Western Australia, with the drilling  successfully enhancing the PGE+Au prospectivity. The Speewah Dome is a new PGE+Au discovery in Australia which is part of the Hart Dolerite large igneous province.

Since 2006, after the discovery of platinum, NiPlats has been drilling the Dome to determine the extent of vanadium and other mineralisation. Further infill drilling is planned for the Red Hill and Buckman vanadium prospects, the unexplored Sunset Flats and Magnetite Valley vanadium prospects, and the interpreted positions of the vanadium and PGE+Au feeder structures west of Red Hill, along the eastern edge of Buckman, and the fault along the eastern edge of Central.A$40 million market-capped NiPlat’s focus is the definition and development of its vanadium– platinum and fluorite discoveries in the East Kimberly region of Western Australia. The tenements contain a very large vanadium deposit with indicated and inferred resources.

Blue Sky Uranium Corp (TSX-V: BSK) has announced the discovery of new uranium-vanadium mineralized areas at the company’s ANIT project in Rio Negro Province, Argentina.

Recent geological mapping and prospecting has identified new mineralized outcrops located 4km to 6km east and northeast of the ANIT West-Central mineralized zone. A total of 45 rock (grab) samples were collected. The highest grade sample contained 0.373 per cent  U3O8 and 0.170 per cent V2O5.  These new discoveries provide further evidence of the depth extent of uranium-vanadium mineralization at ANIT and enhance the potential for further discovery of mineralization below cover.

To date on the ANIT project, the company has identified a 6km long zone of near surface uranium-vanadium mineralization through a series of 83 hand-excavated pits. Blue Sky Uranium Corp is dedicated to actively exploring the Patagonia region of Argentina.

Company news

Largo Resources Ltd (TSX VENTURE:LGO) has issued a statement saying it intended to complete a private placement financing for up to 36,363,636 special warrants of the company, at a price of $0.22 per special warrant, for gross proceeds of up to $8,000,000.

Largo intends to use the net proceeds from the offering to acquire an additional 35.5 per cent interest in its Maracas vanadium project in Brazil and for working capital purposes. Upon completion of the proposed acquisition, Largo would hold an 80 per cent interest in the project and have an option to acquire an additional 10 per cent interest.

Largo Resources Ltd  is a Canadian natural resource development and exploration company with two advanced stage projects: the Maracas Vanadium-PGM deposit in Brazil and the Northern Dancer Tungsten-Molybdenum deposit in the Yukon.

Crosshair Exploration & Mining Corp (CA:CXX) has announced the widest vanadium intercept to date in hole ML-182 from its ongoing vanadium program on the Central Mineral Belt (CMB) Project in Labrador. Holes outside of the currently defined resource continue to yield vanadium results.

The vanadium resource expansion program has been planned with the goal of adding significant pounds of vanadium to the existing vanadium resource without the need for further drilling. Given the fact that the previous drill programs on the CMB project focused exclusively on uranium, most holes were only sampled where uranium was encountered. For this reason, approximately 4,000 metres of existing core needs to be sampled and assayed for vanadium.

Crosshair is a dominant player in the exploration and development of uranium and gold in the US and Canada. Its flagship Project, Bootheel, is located in uranium mining friendly Wyoming and with its in-situ mining potential.

Denison Mines Corp (TSX: DML) has chalked out its 2010 operating plan. The company said this year’s plan and budget will not only generate positive cash flow from  operations, while keeping it debt free in a weak uranium price environment, but will also generate sufficient cash flow to fund an aggressive exploration and development program to increase Denison’s production and profitability for the years ahead.

Denison Mines Corp is a mid-sized uranium producer in North America, with mining assets in the Athabasca Basin region of Saskatchewan, Canada and the southwest United States including Colorado, Utah, and Arizona. The company also has ownership interests in two of the four conventional uranium mills currently operating in North America. Denison also has a portfolio of exploration and development projects in the United States, Canada, Mongolia and Zambia.

While the 2009 vanadium sales were 946,000 pounds V2O5, vanadium production is expected to total approximately 2.8 million pounds of V2O5. This production is a 460 per cent increase in V2O5 production compared to 2009. The White Mesa mill is anticipated to begin processing conventional ore in March and to continue for the remainder of the year.

The company said uranium and vanadium sales were expected to be approximately 1.8 million pounds of U3O8 and 3.4 million pounds of V2O5 in 2010. Inventory available for sale at the end of 2010 is forecast to be 280,000 pounds of U3O8 and 195,000 pounds of V2O5 with an estimated value of $14.8 million at the 2010 budget prices.

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