Vanadium Resources’ (ASX: VR8; DAX: TR3) Chinese Vanadium Industry Roadshow feedback validates Steelpoortdrift Vanadium Project’s development potential

Highlights

• Vanadium Resources Limited concluded their Chinese Vanadium Industry Roadshow on the 24 May 2024.
• The Roadshow highlighted significant demand for grid-scale Vanadium Flow Batteries (‘VFBs’) and high-purity vanadium pentoxide (>99.5% V₂O₅) over the next three to five years.
• The Steelpoortdrift Vanadium Project is seen as a reliable, long-term source of vanadium pentoxide given its long mine life and projected bottom quartile operating costs.

Vanadium Resources Limited (ASX: VR8; DAX: TR3, ‘VR8’ or the ‘Company’), an ASX-listed mineral exploration company, announced that it had concluded its Chinese Vanadium Industry Roadshow. The Roadshow included a series of high-quality meetings with potential offtake partners, Engineering-Procurement-Construction (“EPC”) firms and financiers and strategic equity investors, throughout China.

VR8 reported that China is committed to the rapid development of a significant number of grid-scale Vanadium Flow Battery (VFB) power storage systems. Consequently, VR8 believes that, over the coming three to five years, there will likely be substantial demand for high-purity vanadium pentoxide (>99.5%).

Moreover, during the Roadshow, potential offtake partners affirmed that the world-class Steelpoortdrift Vanadium Project, South Africa, is seen as a reliable and long-term source of vanadium pentoxide. Potential offtake partners noted the advantageous position of the project on the international cost curve and its potential to produce up to 180 years’ worth of vanadium pentoxide at the proposed mining rates.

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The Company already executed memorandums of understanding (MOUs) with Enerflow, Hexiang and Zhongxin, securing commitments that exceed 100% of the planned production from Phase 1 of the Steelpoortdrift Project. The Company continues discussions with different parties across Japan, North America, China, Korea and Europe, with the aim to secure binding contracts for offtake, and also potentially securing further finance and EPC terms.

Plans ahead

To meet the rising demand for VFB energy storages in the coming years, VR8 plans to modify the back end of the salt-roast leach processing plant. This upgrade will enable the production of two product streams: 99.5% V₂O₅ for the VFB market and 98% V₂O₅ for the steel industry. The proportion of each product will be determined by the finalised offtake agreements.

The modification is expected to improve realised sales pricing as it will target higher-purity forms of V₂O₅. Moreover, the Company believes that the net-effect of these modifications are likely to result in an enhancement in post-tax NPV when compared to its October 2022 Definitive Feasibility Study (all else remaining equal).

Data source: Company update

Exploring new opportunities

Additionally, VR8 is evaluating alternative value-accretive products in response to supply and offtake requests from Chinese partners. Potential products under consideration include ammonium metavanadate, ferrovanadium, vanadium nitride, and vanadium electrolyte.

VR8 shares traded at AU$0.056 apiece on 14 June 2024, with a market cap of AU$32.49 million.