Vanadium Resources (ASX: VR8; DAX: TR3) secures offtake MOU with Chinese vanadium nitride producer - Kalkine Media

Highlights

• A Memorandum of Understanding (MOU) has been inked with Hexiang, one of the major producers of vanadium nitride in China.
• The MOU is for production from VR8’s South Africa-based vanadium operations, Steelpoortdrift and Tweefontein.
• The MOU outlines the purchase of 4,000 tonnes per annum (tpa) of vanadium pentoxide (V₂O₅).
• Discussions continue with other international traders and end users for further offtake MOUs and agreements.

Vanadium Resources Limited (ASX: VR8; DAX: TR3) shares jumped 8.6% on Thursday following the announcement of the signing of an MOU with one of the major vanadium nitride producers in China, Panjin Hexiang New Materials Technology Co., Ltd.

Hexiang is a notable player in the manufacturing and distribution of vanadium-nitrogen alloy materials, non-ferrous metals, and chemical products. With its significant expansion, Hexiang has positioned itself as one of the major producers of vanadium-nitrogen alloy in China, boasting an impressive production capacity of 3,200 tpa of vanadium-nitrogen alloy products.

The non-binding MOU has been signed for production from VR8’s Tweefontein and Steelpoortdrift vanadium operations in South Africa.

Details of the MOU

The MOU outlines the supply agreement for 4,000 tpa of V₂O₅ flake over a span of five years, with an option for Hexiang to extend the agreement for an additional five years. This volume constitutes nearly 37% of VR8's projected annual V₂O₅ flake production capacity of around 11,000 tpa for the initial Phase 1 operation.

Furthermore, the MOU sets the stage for further discussions regarding pricing, product quality, and other terms of the offtake agreement. The agreement highlights the continued demand for vanadium products in the Chinese market.

VR8 explores additional offtake deals

VR8 is currently in talks with Chinese, Japanese, Korean, and European end-users and traders to finalise additional offtake MOUs and agreements. These discussions aim to secure the remaining portion of VR8's planned production from Phase 1, totalling approximately 7,000 tpa.

VR8 shares jumped by 8.695% to trade at AU$0.05 apiece during early morning trading hours on 11 April 2024.