- Vanadium Resources has secured a strategic investment of AU$4.6 million through a placement of shares to Raubex Group, at $0.104c per share (64% premium).
- VR8 has a cash position of approximately AU$6.1 million, as of 11 October 2021.
- The Company is now fully funded through DFS and up to FID on its flagship Steelpoortdrift Vanadium Project.
- VR8 intends to establish Steelpoortdrift as possibly the largest vanadium mine in the world.
- The Company has executed a mining services agreement with Raubex for its world-class asset.
Vanadium Resources Limited (ASX:VR8) shares received a major boost on 11 October 2021 after the Company announced it had secured a strategic investment at a significant premium to its last closing price.
The explorer has scored an investment worth AU$4.6 million from Raubex, which is a South Africa-based construction group. The investment will fund VR8’s world-class vanadium asset through a Definitive Feasibility Study (DFS) and up to Final Investment Decision (FID). The DFS is expected to be completed in the September 2022 quarter.
The latest development is a testament to the fact that the Company’s Steelpoortdrift Vanadium Project is attracting significant attention from industry participants, on the back of robust Pre-feasibility Study (PFS) outcomes as well as its untouched high-grade resource.
Steelpoortdrift and other project location in Bushveld Complex (Image source: Company update, 29 March 2021)
Investment to fire up Steelpoortdrift Project
In order to lock in the AU$4.6 million investment, VR8 has entered into a subscription agreement with Raubex Pty Ltd, which is a subsidiary of Raubex Group Ltd, a JSE-listed international infrastructure development, mining services and materials supply group.
The subscription agreement with Raubex Group is strategic in nature as the firm has an in-depth understanding of the mining business in South Africa and it provides VR8 the financial stability to carry on further operations on the project.
VR8 will issue 44,230,769 shares under the subscription agreement. As per the subscription agreement, Raubex will subscribe for VR8 shares at a price of AU$0.104 per share.
The placement price represents a significant premium to the Company’s 15- and 30-day volume-weighted average price (VWAP). The Company is getting a 64% premium on its 30-day VWAP at a share price of AU$0.063 and ~55% premium on its 15-day VWAP of AU$0.067.
VR8 “the most competitive producer of Vanadium in the world”
Welcoming the development, VR8 Chairman Jurie Wessels said the Company is well-positioned to capitalise on its world-class asset.
He emphasised that to realise the intrinsic potential of the Steelpoortdrift Project, VR8 has to secure the right mix of funding mechanisms
“The project has now been firmly placed under the magnifying glass with this investment and the results from our PFS, which point to a very low capital expenditure requirement to construct a mine. This, coupled with the unequalled optionality the large resource lends to increasing volumes as market conditions may demand, gives us a greater measure of comfort that Steelpoortdrift could possibly be the most competitive producer of Vanadium in the world”, Mr Wessels added.
Mining services agreement for Steelpoortdrift
Vanadium Resources (Pty) Ltd, an associate company of Vanadium Resources, has also entered into a mining services agreement with SPH Kundalila (Pty) Ltd, a wholly owned subsidiary of Raubex.
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SPH Kundalila will provide contract mining services at Steelpoortdrift covering drilling, blasting, haulage, backfilling, stockpile management and supply of equipment to conduct mining-related activities.
The agreement will be modified from time to time during every 36-month contract cycle.
About Raubex Group Ltd
Raubex Group is one of the leading infrastructure development and construction materials supply groups in South Africa. Established in 1974, the firm has a history of more than 47 years of providing excellent services to the infrastructure industry.
The firm, which was listed on the JSE in March 2007, marked its presence in the Western Australian market through the acquisition of Westforce Construction in December 2017.
VR8 share price jumps 17%
VR8 stock jumped 17.14% on the back of investment news, trading at AU$0.082 on 11 October 2021. The Company has a market cap of AU$34.31 million.