Daily Newsletter

16 November 2023

Daily Newsletter

16 November 2023

Vanadium Resources raises South African vanadium project stake

Steelpoortdrift is said to have significant vanadium deposits with a mineral resource of 680 million tonnes (mt) at an average in-situ grade of 0.70% vanadium pentoxide (V₂O₅).

Surya Akella

ASX-listed mineral exploration company Vanadium Resources (VR8) has increased its stake in Vanadium Resources (VanRes) to 86.49% from the existing 81.90%.

VR8 acquired an additional 4.59% stake in VanRes from Math-Pin. VanRes owns the Steelpoortdrift vanadium project in Limpopo, South Africa.

The agreement was entered into in May 2023, under which VR8 aimed to acquire 100% of the interests owned by Math-Pin in VanRes. As per the agreement, it acquired the 4.59% stake (293 shares) in VanRes for R2,930 ($160.80) and eight million share options.

If exercised, the share options will be converted into fully paid shares, representing a 1.48% stake in VR8’s enlarged share capital.

Math-Pin is a black economic empowerment party, constituted to make VanRes comply with the minimum ownership requirements set by the South African Government.

This agreement was also subject to several conditions to ensure the ownership of VanRes complied with the legislation.

The approval was secured from the South African Reserve Bank after all conditions were satisfied.

Last month, VR8 acquired a 7.95% stake in the project from Obeec for a cash payment of R5,800 and 14 million share options.

Once exercised, they will be converted into 14 million shares, representing 2.54% of VR8’s share capital.

With the closure of the agreement, Math-Pin will own 13.51% of the project.

VR8 executive chairman Jurie Wessels said: “We are very pleased to have completed the transaction with Math-Pin and welcome their transition from a private shareholder in VanRes to a shareholder of VR8. As a shareholder of VR8, Math-Pin will still be able to contribute to the future capital requirements of the project while sharing in VR8’s success from the project and any future endeavours.

“VR8’s increased ownership provides the company with a stronger base to raise the required construction financing and achieve the critical pathways to develop the project. We are pleased to have now completed transactions that provide significant value to both parties and align with the regulatory environment of the South African Government.”

Steelpoortdrift is said to have significant vanadium deposits with a mineral resource of 680mt at an average in-situ grade of 0.70% V₂O₅.

This is approximately equivalent to 4.74mt of contained metal.

The proved and probable ore reserve is 77mt at an average in-situ grade of 0.72% V₂O₅, which is equivalent to 0.55mt of contained metal.

In October 2022, a detailed feasibility study estimated the initial mine life at 25 years.

The project’s post-tax net present value is estimated at $1.2bn and its internal rate of return at 42%, with a 27-month payback period. The pre-production capex is expected to be $211m.

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