Vanadium Resources (ASX:VR8 | DAX:TR3) has executed an offtake term sheet with US Vanadium for full access to the vanadium-bearing slag production from the company’s V-Iron Plant, a next-generation critical minerals smelter.
The offtake will support the development of Vanadium Resources’ Steelpoortdrift Vanadium Project, located in the Bushveld Geological Complex in South Africa, and the potential development of a large-scale, brownfield V-Iron smelting plant in South Africa.
The agreement includes standard offtake provisions and specifies that the binding offtake agreement will be negotiated upon completion of the V-Iron Plant Feasibility Study and that, if no binding offtake is agreed upon, US Vanadium can enter into an offtake agreement for 20% of the vanadium slag from the plant.
The agreement outlines a clear commercial pathway for the potential sale of ‘high-grade’ vanadium slag product into the US market. The agreement will also help to align the Steelpoortdrift project with US critical minerals supply chains focused on the defence industry.
US Vanadium is a vanadium processor based in the US, focused on producing finished vanadium products at its Arkansas refinery.
Recent metallurgical test work has confirmed that ‘high-grade’ vanadium slags from the Bushveld Complex in South Africa are well suited to the refinery’s flowsheet.
Vanadium Resources Executive Chairman Jurie Wessels says that the partnership with an offtaker in the US “opens the door to transform our fully permitted, tier one, multi-generational Steelpoortdrift Project from a world-class resource into a cornerstone critical mineral supplier of vanadium to Western markets”.
“By adopting a processing route already proven in South Africa, which is now dominant from Chinese and Russian production, we can extract the full suite of metals contained in our orebody,” Wessels says.
“This approach stands to strengthen VR8’s economics, diversify our revenue base, and align production with the needs of Western supply chains seeking stability of feedstock.”
Vanadium Resources is now focused on advancing towards production with the development of the V-Iron Plant as a key priority. The plant is supported by the JORC mineral resource and ore reserves already outlined in the 2022 Definitive Feasibility Study.
The company is now seeking funding from strategic investors backed by the US Government and has appointed Rand Merchant Bank as its exclusive financial advisor and capital sourcing agent.
Strengthening Western critical minerals supply chains
The company points out that global vanadium supply is currently concentrated in China and Russia, accounting for about 93.6% of global production. While the US and Europe are significant consumers, they have limited access to domestic supply.
Vanadium Resources is positioning South Africa as a strategically significant source of supply as it hosts some of the world’s largest and highest-grade JORC-compliant vanadium resources. Steelpoortdrift is among them, which has a JORC resource of 4.74 million tonnes of contained vanadium pentoxide.
Vanadium Resources is focused on advancing Steelpoortdrift from development into production and real-world application.
Write to Amy Rotman at Mining.com.au
Images: Vanadium Resources
