Vanadium Resources (ASX: VR8) making strides: Steelpoortdrift Offtake MoUs and FEED Workstreams - Kalkine Media

Highlights

• Vanadium Resources’ March quarter was focused on advancing the Steelpoortdrift Project in South Africa.
• The period saw the company advancing discussions for offtake deals with interested parties.
• The company progressed work on the FEED packages and delivery model with focus on the Steelpoortdrift and Tweefontein vanadium project.
• In mid-April, the company entered an offtake deal with Panjin Hexiang New Materials Technology Co., Ltd.
• On 30 April 2024, VR8 announced additional MoU with Enerflow Technology Co., Ltd.

Vanadium Resources Limited (ASX: VR8; DAX: TR3) has released its quarterly report for the period ended 31 March 2024. Throughout the quarter, the company remained dedicated to progressing its Steelpoortdrift Vanadium Project in South Africa. This project comprises the Steelpoortdrift mine and concentrator, as well as the proposed Tweefontein Salt Roast Leach operation.

The company has been witnessing a notable rise in the number of parties showing interest in the project. While evaluating these parties, the company says that it maintains its focus on maximising the project's Net Present Value (NPV) for current shareholders, while also exploring additional value-adding opportunities.

During the quarter, VR8 received significant offtake interest from Chinese, Japanese, Korean, and European end-users and traders. The company has been in talks with several parties interested in joining hands for the project development. It is eyeing offtake memorandum of understanding (MOU) / agreements and potential strategic equity investments.

Offtake deal with Panjin Hexiang New Materials Technology

In mid-April, the company entered MoU with Panjin Hexiang New Materials Technology Co., Ltd. for vanadium production from its Steelpoortdrift and Tweefontein operations.

The non-binding MOU entails supplying 4,000tpa of V₂O₅ flake for five years, extendable for another five years. This constitutes approximately 37% of VR8’s planned annual V₂O₅ flake production capacity of around 11,000tpa from Phase 1. The MOU sets a foundation for further negotiations regarding price, product quality, and other offtake terms.

Offtake MoU with Enerflow Technology Co., Ltd

On 30 April 2024, the company unveiled a new non-binding MoU with Enerflow Technology Co., Ltd., a subsidiary of Tian’en Energy Co., Ltd. The MoU is for the offtake of V₂O₅ production from the Steelpoortdrift project. The MoU outlines the sale of 4,000tpa of V₂O₅ for an initial term of 5 years, with the possibility of extension for an additional 5 years.

Data source: Company Update

FEED workstreams make headway

During the quarter, the company progressed work on the Front-End Engineering Design (FEED) packages with a focus on:

• Redesigning some parts of the concentrator and SRL plants
• Preparing complete site plans to help with managing interface risks across the operations
• Engineering documentation and technical specifications for relevant tender packages for each part of the project

Work conducted as part of the FEED included reviewing DFS designs and redesigning plant and equipment components. Efforts also focused on consolidating design packages, creating engineering documents, and developing project schedules. Additionally, discussions were held regarding the appointment of a Project Construction Manager.

In the upcoming quarter, the company intends to issue the above packages to appropriate engineering firms. This step aims to procure updated estimates for both capital and operating expenses. Subsequently, detailed design and construction tender packages will be formulated for each aspect of the Project based on these revised cost assessments.

Environmental Authorisation

Additionally, the company secured an Environmental Authorisation for the Tweefontein SRL site. It received Social and Labour Plan feedback from the Department of Mineral Resources & Energy. The remaining environmental and water applications are progressing through approval processes.

VR8 made significant strides during the March quarter, particularly in advancing discussions for offtake agreements and progressing key aspects of the Steelpoortdrift Project in South Africa. With a growing interest from various parties and the recent MoUs, the company is gearing up to capitalise on the potential of its vanadium operations. As the company moves forward, it remains committed to maximising value from its assets while continuing to explore opportunities for growth and development in the vanadium market.

Shares of VR8 were trading at AU$0.045 midday on 30 April 2024, up over 2% from the last close.