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QEM LIMITED — Interim / Quarterly Report 2021
Apr 14, 2021
65644_rns_2021-04-14_cfda52cb-4636-47e7-a384-8ab64577089e.pdf
Interim / Quarterly Report
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ASX ANNOUNCEMENT ASX ANNOUNCEMENT
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ASX: QEM
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15 April 2021
Quarterly update for the period ending 31 March 2021
QEM Limited (ASX: QEM) (“ QEM ” or “ Company ”) is pleased to provide an update on its activities for the quarter ending 31 March 2021.
QEM Managing Director, Mr Gavin Loyden, said the Company proactively pursued a green hydrogen strategy during the quarter amid buoyant market conditions, a supportive policy environment and optimal project location.
“During the March quarter and post-quarter end, we laid the groundwork to advance our green hydrogen strategy on site at our Julia Creek project, engaging two hydrogen industry experts to undertake studies into QEM’s green hydrogen opportunities,” Mr Loyden said.
“Importantly, the hydrogen strategy aligns with the broader strategic direction of our flagship Julia Creek vanadium and oil shale project in North Queensland, as QEM looks to target both the liquid fuels and renewable energy sectors.
“The Company has taken tangible steps to streamline our broader business strategy to drive these two intertwined developments forward as efficiently as possible.”
Green Hydrogen Strategy Context and Rationale
The creation of hydrogen is considered “green” if renewable energy, such as solar panels or wind turbines, are used to generate electricity for electrolysis of water, which creates no carbon dioxide in the production process and may be used for transport, energy and other industrial purposes.
Green hydrogen looks set to play a key role in helping Australia meet global decarbonisation targets.
QEM’s advancement of its green hydrogen strategy follows growing investment and interest in the renewable energy source from both the private and public sectors.
This is highlighted by the Queensland state government appointing Australia’s first dedicated minister for hydrogen in November 2020, with the Queensland government stating that it expects hydrogen to play in a key role in both the local economy and as a major new export opportunity for the state.
Additionally, a survey conducted with Queensland Resources Council member company CEOs in February 2021 highlighted that the majority of resources companies are actively looking at new technologies, such as hydrogen, to reduce emissions and grow their business in a sustainable way.
The Julia Creek project is conveniently located in the North West Minerals Province (NWMP) in Queensland and also falls within the newly designated Eastern Resource Development Corridor, which is home to numerous other resource projects, providing QEM with significant opportunities to support the energy needs of these companies to develop their projects, as well as QEM’s own project.
QEM Limited John Foley Chairman Level 11, 216 St Georges Terrace Gavin Loyden Managing Director Perth WA 6000 Australia Daniel Harris Non-Executive Director David Fitch Non-Executive Director
www.qldem.com.au [email protected] +61(0) 8 9481 0389
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The project is also positioned in a transport nexus in North Queensland, as road trains and trucks travelling along the Flinders Highway between Townsville and the NWMP typically need to refuel in the Julia Creek area. This presents additional local opportunities to QEM in the longer term if the proliferation of hydrogen-powered vehicles emerges, particularly for transport and mining fleets.
The Company has recently received a number of unsolicited approaches from market participants, seeking to discuss off-take arrangements for potential hydrogen production at Julia Creek. QEM is encouraged by these approaches and the speed with which local markets seem to be developing, validating the green hydrogen strategy adopted. The Company will assess and negotiate off-take arrangements as the green hydrogen feasibility studies advance.
E2C Engaged for Green Hydrogen Capital and Operating Cost Assessment
On 15 March 2021, QEM announced it commenced studies into green hydrogen opportunities on site at the Company’s flagship 100%-owned Julia Creek vanadium and oil shale project in North West Queensland.
To assist in QEM’s assessment of capital and operating costs for potential green hydrogen production, the Company appointed E2C Advisory Pty Ltd ("E2C").
E2C previously assisted the Company with the review of a processing technology utilising a technologically advanced hydrocarbon solution for oil extraction (refer to ASX announcement dated 14 April 2020) and have extensive experience in electrolysers used for large scale hydrogen production.
QEM will commence discussions with the Queensland state government on progressing the approval process to access water resources for the potential development, following the successful completion of the financial studies to be conducted by E2C.
DNV Australia Engaged for Green Hydrogen Power Generation Studies
Post-March quarter end, QEM announced on 6 April 2021 that it engaged DNV Australia to undertake a preliminary assessment into power generation from solar and wind farms, as part of the Company’s broader assessment into the production potential of green hydrogen on site at the Julia Creek project.
DNV Australia’s preliminary assessment encompasses solar farm resource mapping and modelling, as well as a preliminary solar photovoltaic (solar PV) system design.
Additionally, as part of the scope of works, DNV Australia will develop a preliminary wind turbine layout and assess wind farm resource mapping and modelling.
DNV Australia’s preliminary assessment is scheduled to be finalised by the end of Q2.
Following the successful completion of the preliminary assessment, DNV Australia will undertake more definitive wind resource measurements and solar resource monitoring, which is anticipated to be underway in Q3.
QEM Limited John Foley Chairman Level 11, 216 St Georges Terrace Gavin Loyden Managing Director Perth WA 6000 Australia Daniel Harris Non-Executive Director David Fitch Non-Executive Director
www.qldem.com.au [email protected] +61(0) 8 9481 0389
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About DNV
DNV Australia is a wholly-owned subsidiary of DNV, one of the world’s largest technical consultancy and supervisory firms in the global renewable energy sector.
In the energy industry
DNV provides assurance to the entire energy value chain through its advisory, monitoring, verification, and certification services. As the world's leading resource of independent energy experts and technical advisors, the assurance provider helps industries and governments to navigate the many complex, interrelated transitions taking place globally and regionally, in the energy industry. DNV is committed to realizing the goals of the Paris Agreement, and supports customers to transition faster to a deeply decarbonized energy system.
HRL oil extraction- optimisation testing
HRL have commenced a suite of tests designed to optimise the production and separation of oil and gas produced within the extraction process. This is a short program run over three weeks, the results of which will inform the design and specification of a bench scale pilot.
R&D Tax Incentive
The Company has recently submitted a research and development (R&D) claim for FY2020 totalling $281,416. Funds are expected to be received in the June 2021 quarter.
COVID-19 Impacts
QEM is pleased to report that it continues to experience no material COVID-19 impacts on its operations. The Company is maintaining adherence to Government directives to ensure it does its part to mitigate the risk of an outbreak.
Related Party Payments
ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the Quarter totalled $117k. The Company advises that this relates to non-executive director’s fees, executive directors’ salaries and a technical consulting fee to Energy Source LLC (an entity associated with Mr Daniel Harris).
Other ASX requirements
ASX Listing Rule 5.3.1: Exploration and Evaluation Expenditure during the Quarter was $218k. Full details of activities during the Quarter are set out above.
ASX Listing Rule 5.3.2, there were no mining production and development activities during the Quarter.
QEM Limited John Foley Chairman Level 11, 216 St Georges Terrace Gavin Loyden Managing Director Perth WA 6000 Australia Daniel Harris Non-Executive Director David Fitch Non-Executive Director
www.qldem.com.au [email protected] +61(0) 8 9481 0389
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Tenement Schedule
In line with obligations under ASX Listing Rule 5.3.3, QEM Limited provides the following information with respect to its Mining Tenement holdings as at 31 March 2021.
| Project | Country | Tenement | Status | % Held | Change During Quarter |
|---|---|---|---|---|---|
| Julia Creek | Australia | EPM25662 | Granted | 100% | - |
| Julia Creek | Australia | EPM25681 | Granted | 100% | - |
| Julia Creek | Australia | EPM26429 | Granted | 100% | - |
| Julia Creek | Australia | EPM27057 | Granted | 100% | - |
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This announcement was authorised for release on the ASX by the Board of QEM Limited.
For further information, please contact:
Gavin Loyden Shane Murphy Managing Director Investor Relations P: +61 7 3303 0161 P: +61 420 945 291 E: [email protected] E: [email protected]
ABOUT QEM
QEM Limited (ASX: QEM) is a publicly listed company which is focussed on the exploration and development of its flagship Julia Creek Project, covering 250km² in the Julia Creek area of North Western Queensland.
The Julia Creek vanadium / oil shale project is a unique world class resource with the potential to deliver innovative energy solutions, through the production of energy fuels and vanadium pentoxide. QEM strives to become a leading producer of liquid fuels and in response to a global vanadium deficit, also aims to become a global supplier of high-quality vanadium pentoxide, to both the nascent energy storage sector and the Australian steel industry.
This globally significant JORC (2012) Mineral Resource of 2,760 Mt @ 0.30% V2O5 is one of the single largest ASX listed vanadium resources and represents a significant opportunity for development.
The tenements form part of the vast Toolebuc Formation, which is recognised as one of the largest deposits of vanadium and oil shale in the world and located less than 16km east of the township of Julia Creek. In close proximity to all major infrastructure and services, the project is intersected by the main infrastructure corridor of the Flinders Highway and Great Northern Railway, connecting Mt Isa to Townsville.
QEM Limited John Foley Chairman Level 11, 216 St Georges Terrace Gavin Loyden Managing Director Perth WA 6000 Australia Daniel Harris Non-Executive Director David Fitch Non-Executive Director
www.qldem.com.au [email protected] +61(0) 8 9481 0389