Vanadium Resources (ASX: VR8; DAX: TR3) exceeds 100% of offtake under MOU from its world-class Steelpoortdrift Vanadium Project

Highlights

• VR8 has signed a new Memorandum of Understanding (MOU) for the offtake of V₂O₅ production from its world-class Steelpoortdrift Vanadium Project (‘Project’).
• The MOU is for the sale of 4ktpa of V₂O₅ flake over five years, with an option for a five-year extension.
• Earlier, MOUs were signed with Panjin Hexiang New Materials Technology Co., Ltd and Enerflow Technology Co., Ltd.
• With this latest MOU, VR8 now has more than 100% of its Phase 1 production for Steelpoortdrift under offtake MOUs.
• Steelpoortdrift is one of the largest and highest-grade vanadium resources in the world, and VR8 is positioning itself to meet growing global demand for Vanadium Flow Batteries.

Vanadium Resources Limited (ASX: VR8; DAX: TR3) had a ~10% surge in its share price to AU$0.046 on Monday morning, 13 May 2024. The jump followed news from the company regarding an MOU with Hunan Zhongxin New Materials Technology Co., Ltd., for the offtake of V₂O₅ production from its world-class Steelpoortdrift Vanadium Project.

Following this development, over 100% of the Phase 1 production from Steelpoortdrift is now subject to offtake MOUs. These MOUs are expected to play an essential role in the company’s overarching funding strategy, with the aim of securing debt financing and strategic equity investment for Steelpoortdrift.

Details of the MOU

The MOU mirrors the MOUs recently entered with Panjin Hexiang New Materials Technology Co., Ltd and Enerflow Technology Co., Ltd. Like previous MOUs, this MOU also provides for the sale of 4ktpa of V₂O₅ flake over a five-year period and includes an option for an additional five years. However, the company notes that this amount of tonnage for offtake is considered a base level of demand for each of the parties and serves as a starting point for negotiations. If converted to a binding MOU, the final agreed to tonnages for each party may vary.

The MOU establishes the basis for further discussions regarding price, product quality, and additional offtake terms. The MOU signed with Zhongxin accounts for approximately 37% of VR8's projected annual average production capacity of approximately 11ktpa for V₂O₅ flake from the initial Phase 1 operation of the Project.

The company is advancing discussions with multiple European, Korean, Japanese, and Chinese end-users and traders for additional offtake agreements. Further, the company is seeking financing solutions with each of these prospective offtakers with the aim to optimise the projected net present value (‘NPV’) of the Project for existing shareholders.