QEM Limited (“QEM” or “the Company”), was admitted to the official list of the Australian Securities Exchange on October 19, 2018 under the code QEM, with its sole project being the 100% owned Julia Creek Project (“Julia Creek” or “the Project”) located near the town of Julia Creek in North Queensland. Julia Creek is located over the Toolebuc Formation, which is the host to widespread vanadium mineralisation, and is also considered an “oil shale”, hosting significant petroleum resources.
The Company has a Mineral Resource Estimate (“MRE”) of 1,700 Mt @ 0.34% V2O5 (5.78Mt contained V2O5) , with 3C Contingent Oil Resources of 589MMbbl, based on 90% extraction of Petroleum Initially In Place (“PIIP”) of 654MMbbl, with a yield of 64.1 litres/tonne.
Resources are shallow, flat lying and potentially open pittable, with the Toolebuc Formation long being recognised for the vanadium and petroleum potential, with significant historic work being done for both commodities. The current vanadium price rises (possibly reflecting a structural change in the market, leading to stronger prices for the longer term) has awakened interest in the area, with at least four companies, including QEM, now having significant interests.
On the petroleum front (however with petroleum being of secondary interest behind the vanadium), shallow areas of the Toolebuc Formation could in the longer term (and in any times of significant conflict) be a strategic asset given Australia’s reliance on crude oil and refined product imports, and a lack of reserve stocks. The Toolebuc Formation hosts a discovered petroleum resource of ~22Bbbl, however any development has been hampered by the need for treatment through retorting with high costs requiring long term +US$80/bbl oil prices to be economically viable.
Also on the petroleum treatment side, QEM has signed a Memorandum of Understanding (“MoU”) with Petroteq Energy Inc (“Petroteq”, PQE.TSX-V) with regards to a proprietary, environmentally friendly closed loop solvent extraction process for which commercial production has recently been initiated treating US oil sands. Under the terms of the agreement, Petroteq will carry out test work on samples of the Toolebuc Formation to assess the suitability of the process for Julia Creek. Should this be successful it could be a game changer, in allowing for the low cost treatment of the oil shales through modular equipment.
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