Vanadium Resources (ASX:VR8) ropes in leading global financial advisor to fast-track Steelpoortdrift Project - Kalkine Media

Highlights

• Vanadium Resources has appointed HCF International Advisors to assist with debt/offtake evaluation and arrangement of debt finance.
• HCF International boasts extensive experience in providing structured finance advisory services for the global mining sector.
• Since 2003, HCF has raised over US$12 billion in project financing.
• VR8’s DFS on the Steelepoortdrift Vanadium Project is running on time and within budget.

Vanadium Resources Limited (ASX:VR8) has appointed HCF International Advisors Ltd as its principal debt advisor.

The ASX-listed company is nearing the completion of ongoing Definitive Feasibility Study (DFS) on its flagship Steelpoortdrift Vanadium Project. The company, which expects to wrap up the DFS by September 2022, believes that it is an appropriate time to fast-track the business by moving towards the project financing stage.

Project location map (Image source: VR8 update)

For the latest updates on the Steelpoortdrift project, click here.

It is important to mention that the Steelpoortdrift Project is one of the highest grade and largest vanadium deposits in the world, with a resource of 612Mt @ 0.78% V₂O₅.

The DFS study is being carried out with a focus on mining activity to support the initial production of 12,500tpa of V₂O₅ flake at an estimated CAPEX of US$200 million.

Why did VR8 rope in HCF International Advisors?

UK-based HCF International Advisors (HCF) is a prominent name in the field of global corporate finance advisory services. The firm specialises in the metals and mining sector with a strong track record of securing funds for projects based in Africa.

HCF is instrumental in providing strategic and financial advice to companies across the complete life cycle of a project, from securing funding to bringing projects into the production phase. Since 2003, HCF has helped in raising funds of over US$12 billion in project financing.

The firm has been successful in building a reputation for executing transactions in emerging markets across commodities.

With HCT’s deep understanding of political risk mitigation and expertise in the funding of critical mineral projects, VR8 expects to arrange financing solutions that could keep the equity dilution to a minimum.

Terms of appointment

HCF’s primary role would be to provide financial and strategic advice, as well as assistance in approaching potential lenders to secure long-term financing for the Steelpoortdrift Project. This may include a combination of commercial bank funding, export credit agency/development financial institutions, and, if necessary, alternative funding such as debt funds, royalty, streaming, and equities.

The engagement will be handled in two stages. The first stage will include preparing the business for formal engagement with interested parties by conducting a thorough project risk analysis, developing a plan to help the company to reduce political risks by enlisting development financial institutions, and developing a funding strategy to achieve fully funded project funding.

The second stage will be aimed at the execution of formal engagement of interested parties, assistance with the appointment of mandated lead arrangers, independent technical engineers, and other advisers, management of the due diligence processes, negotiation of term sheets, and assistance with related issues up to closing and the accomplishment of post-transaction deliverables.

HCF has agreed to receive a part of its fees in shares at VR8’s discretion.

The DFS is currently running on schedule and within budget. The engagement with HCF is expected to accelerate VR8’s progress toward a final investment decision, given the impending completion of the DFS.

VR8 shares were trading at AU$0.073 midday on 22 August 2022.