Australian Vanadium (ASX:AVL) has signed a new option agreement with the landowner of the proposed location for its vanadium processing plant at Tenindewa, 60km east of Geraldton in Western Australia, for the Australian Vanadium Project.
In October 2019 and October 2020 the company announced that it had extended and signed an option agreement to purchase land for the Processing Plant.
Australian Vanadium has now signed the New Option Agreement which replaces the previous option agreement and allows it to define, subdivide and purchase a portion of the land under option.
The new agreement relates to an area of 1,334 acres, with a purchase price of $4,000 per acre reflecting current market prices in the region. The purchase price is payable in either cash or shares in the company, or a combination of both, at the owner’s election.
The number of Australian Vanadium shares to be issued, if any, will be determined by using the 5-day VWAP immediately preceding the date of payment.
The new option agreement provides for two 12 month option terms. The option fee for the first option term of $53,360 (plus GST) is payable immediately in cash. Australian Vanadium may exercise the second option term by issuing notice and paying the second option fee by 4 September 2024.
The option fee for the second option is to be paid in shares in Australian Vanadium with the value of $53,360 (plus GST), with the number of shares to be determined as for the first option.
The consent of the Western Australian Planning Commission is required to subdivide the Option Land. Under the agreement, Australian Vanadium is granted a licence to access the Option Land immediately for the purpose of drilling, engineering, surveying, and excavation.
“We continue to progress our ‘pit to battery’ strategy as we move the Project towards production“
It also contains provisions allowing the company to lease back to the landowner those parts of the Option Land that AVL does not intend to use for the project, or to sell back the option land to the landowner at the purchase price in certain circumstances.
Addressing the agreement, Australian Vanadium CEO Graham Arvidson comments: “AVL is pleased to have worked with the landowners of the Tenindewa processing plant location to establish an option agreement which benefits both parties. We continue to progress our ‘pit to battery’ strategy as we move the Project towards production.”
The project’s mine site is located some 40km south of the mining town of Meekatharra in Western Australia.
Australian Vanadium will undertake crushing, milling and beneficiation of vanadium bearing magnetite ore at the mine site location and transport the resulting concentrate to the proposed Processing Plant near Geraldton, where final refinement to high-quality, high-value vanadium products and an iron-titanium coproduct will take place.
Write to Adam Orlando at Mining.com.au
Images: Australian Vanadium