Vanadium Resources’ (ASX:VR8) share price spiked 92.86% to $0.027 as of 1.45pm AEST on the back of reaching a non-binding agreement for the supply of vanadium-rich magnetite direct shipping ore (DSO) from the Steelpoortdrift Vanadium Project in South Africa.
The agreement was reached between China Precious Asia (CPAL) and Vanadium Resources’ subsidiary, in which VanRes will supply 100,000 metric tons of product per month.
CPAL will load and collect the supply from VanRes. In any month, the amount sold may increase or decrease by 25% from the average at the option of VanRes.
The agreement will begin no later than 30 November 2025.
Executive Chairman Jurie Wessels says it became apparent that there is a “compelling” opportunity to potentially transition the company toward near-term production.
“This has been made possible by our advanced permitting status and the suite of valuable minerals within Steelpoortdrift’s ore, which contains not only vanadium credits but also iron-rich magnetite,” Wessels says.
“We anticipate that a DSO operation at Steelpoortdrift has the potential to generate material positive operating cashflows. While the memorandum of understanding is non-binding, the level of engagement and interest from CPAL gives me confidence that a binding and value-accretive commercial agreement can be reached.”
The company is continuing to assess a range of other strategic opportunities, including potential acquisitions that may complement a development scenario.
China Precious Asia, founded in 2012, is a metals and minerals trader and processor of magnetite-bearing ore, targeting the Asia steel markets.
Vanadium Resources is a low-cost vanadium producer focused on advancing its Steelpoortdrift Project from development into production and real-world application.
Write to Aaliyah Rogan at Mining.com.au
Images: Vanadium Resources
