Vanadium Resources (ASX:VR8, FRA: TR3) boosts Steelpoortdrift potential with H1 developments

Highlights

• Vanadium Resources (ASX: VR8, FRA: TR3) wrapped up the Definitive Feasibility Study on its Steelpoortdrift Vanadium Project in H1.
• The study confirmed that the project holds economics and technical viability to deliver 484,000t of vanadium pentoxide over 25 years.
• For its planned Salt Roast Leach Plant, the company picked a 135-hectare site and inked an option agreement.
• SPD’s Mineral Resources now stands at 680Mt averaging 0.70% V₂O₅ at a cut-off grade of 0.45% V₂O₅ and Measured Mineral Resources is at 145Mt averaging 0.72% V₂O₅.

The first half of FY23 saw Vanadium Resources Limited (ASX:VR8, FRA: TR3) moving forward with full gusto to develop its flagship Steelpoortdrift Vanadium Project (SPD) in South Africa. The SPD, VR8 says, is one of the largest and highest-grade vanadium deposits in the world.

The reported period saw major developments including encouraging Definitive Feasibility Study (DFS) outcomes, updated mineral resource and ore reserve estimates, and acquisition of a new property.   

Data source: company update

Key activities towards developing Steelpoortdrift Vanadium Project

• Impressive Steelpoortdrift DFS numbers
  According to the company report, DFS results confirmed that the project holds strong economics as well as technical viability to deliver 484,000t of V₂O₅ flake over 25 years. The study confirmed the ‘SPD’s potential to be a world-class, large-scale and low-cost vanadium producer with competitive Opex and Capex metrics’.

Because of the high-grade quality of the mineralisation and the low Capex requirement of US$211 million, the company believes that the project will be able to produce an annual free cashflows of US$152 million with a payback period of 27 months.

• The project’s Mineral Resource and Ore Reserve estimates have been updated to 680Mt at 0.70% V₂O₅ at a cut-off grade of 0.45% V₂O₅, and to 76.86Mt at 0.72% V₂O₅, respectively, after considering geology reinterpretation, enhanced block model and Life of Mine plan.

• The period saw the signing of an option agreement for the acquisition of a 135-hectare industrial site for the planned Salt Roast Leach (SRL) Plant. The property within the mining hub of Steelpoort in the Eastern Bushveld Igneous Complex and is within a 15km radius of the SPD Mine Site.

Image source: Company update

• A leading independent corporate finance advisory boutique, HCF International Advisors Ltd has been welcomed onboard as debt funding advisor for better arrangement of debt finance for the project development.

• Advance-level talks are underway with multiple potential strategics, commodity traders, offtake parties, and debt financiers for formal construction funding process.

• Mining executive and financier, Mr John Ciganek was appointed as MD (Managing Director) and CEO (Chief Executive Officer) of the company during the half-year period.
  

Stock price performance

VR8 shares were spotted trading at AU$0.075 midday on 29 March 2023, with an uptick of over 4% from the last close. The company shares have recorded a jump of more than 25% in the year-to-date period.