Why Technology Metals Australia Entered A Trading Halt

Mineral exploration company Technology Metals Australia Limited [ASX:TMT] entered a trading halt this morning, pending the release of a company announcement.

Its current share price sits at 30 cents.

TMT is an exploration company focused on identifying exploration projects in Australia and overseas, with the aim of discovering mineral deposits. The company’s primary exploration focus is on the Gabanintha Vanadium Project.

What’s the cause for the trading halt?

Technology Metals’ trading halt occurred in connection with a proposed equity raising to be conducted by way of a share placement.

The company has made significant mineral finds at its Gabanintha project and expects to have its definitive feasibility study completed by mid-2019. However, they’ll likely need the extra capital to continue.

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TMT has been burning through its cash recently, reporting a net operational loss of $4.371 million as of December 2018, as compared to a loss of $860,000 in the last corresponding period.

Back in September 2018, the company announced a placement of fully paid shares to institutional and high net worth investors. The placement raised $6 million at a price of 50 cents per share.

What’s next for Technology Metals?

Although TMT’s vanadium project is still some ways off from its first production shipment, the company could find itself in a lucrative position once production starts — if it can manage to find enough short term.

The future for vanadium is looking particularly bright. The price had been on a steady upwards trajectory, up more than 130% from its 2016 level.

Increased demand and reduced global supply spurred on the dramatic price growth, which was also bolstered by the growing use of vanadium in energy storage.

Several project closures in 2015 and 2016 saw stocks rapidly depleting last year. When Evraz Highveld shut down, 10–15% of global supply was removed.

The vanadium price increased to in excess of US$30/lb in late 2018, from a low of less than US$4/lb in early 2017 before seasonal factors in the Chinese market saw prices return to around US$16.50/lb in early 2019.

TMT’s current Gabanintha Project consists of 98.4 million tonnes at 0.8% vanadium in the Northern Block and 21.5 million tonnes at 0.9% vanadium in the Southern Tenement.


Ryan Clarkson-Ledward,

For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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