Ferro-Alloy (FAR) Shares Fell 12.5% on Lower Vanadium Production, Higher Revenues

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Simon Mugo
Updated: 28 Sep 2021

Shares of Ferro-Alloy Resources Ltd (LON: FAR) crashed 12.5% after revealing delays in the delivery of vanadium concentrate from its existing operations during the six months to June 30, 2021.

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The vanadium producer attributed the lower production figures to interruptions caused by the COVID-19 pandemic, which saw vanadium production fall 37% in Q2, 2021. The company noted that concentrate supply had stabilised from June 2021.

Ferro-Alloy generated $1.5 million in revenues during the six months, representing a significant improvement to the $1.1 million generated in H1 2020 driven by higher vanadium prices that compensated for the lower production figures.

The company made a net loss of $1.1 million, a significant reduction compared to the $1.7 million loss generated in a similar period last year.

The vanadium miner had S$8.2m in cash as of 30 June 2021, leaving it in a solid financial position to keep funding its Balasausqandiq vanadium project, which is currently undergoing a feasibility study.

Ferro-Alloy Resources also noted that Mick Davis and his Blue Vision team had honoured their promised investment in the company of $10.1 million. The company also made significant progress in increasing its production capacity.

The company’s prospects are pretty promising, which makes today’s selloff seem a bit exaggerated. While the Balasausqandiq vanadium project is still far from reaching production stages, its current operations are progressing quite well.

*This is not investment advice.

Ferro-Alloy share price.

IG chart of Ferro-Alloy share price 28-09-2021

Ferro-Alloy shares crashed 12.46% to trade at 26.7p, falling from Monday’s closing price of 30.5p.

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