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- Vanadium Resources (VR8) completes a definitive feasibility study for the Steelpoortdrift project in South Africa
- The company says the DFS confirms the world class potential of Steelpoortdrift to become a vanadium producer with competitive financial metrics
- The project has a 25-year life of mine with a post-tax net present value of US$1.21 billion (A$1.9 billion), and Vanadium expects to spend US$211 million prior to production
- As part of the DFS, the project’s MRE has increased by 2.7 per cent and it has an ore reserve estimate of 76.8 million tonnes at 0.72 per cent vanadium pentoxide
- Shares in Vanadium Resources are up 15.8 per cent, trading at 11 cents as of 3:32 pm AEST
Vanadium Resources (VR8) has completed a definitive feasibility study (DFS) for its majority-owned Steelpoortdrift project in the Limpopo province, South Africa.
The DFS followed the pre-feasibility study which was released last year. The newly completed study reaffirmed Steelpoortdrift’s potential to be a world class, large scale and low cost vanadium producer with competitive operational and capital expenditure metrics.
The project is forecast to produce 484,000 tonnes of vanadium pentoxide flake over 25 years with a post-tax net present value (NPV) of US$1.21 billion (A$1.9 billion).
VR8 Chair Jurie Wessels said the NPV reflects the company’s growing confidence in the project.
“This reaffirms the quality of the work we conducted over the last three years, the intrinsic attributes of the deposit and its well-developed location.
“This illustrates the potential of the project to outperform its competition when markets are favourable … and to be well suited to attract favourable debt funding and competitive off-take arrangements, which will be our focus in the coming months up to a final investment decision.”
The life of mine (LOM) earnings before interest, taxes, depreciation and amortisation is estimated to be around US$5.2 billion, with an additional LOM of up to 67 years readily available in the designed open pits within a low environmental and social impact inclusion zone.
In terms of costs, Vanadium Resources expects pre-production capex to total US$211 million (including contingency) with expansion capex, planned for years three to five, expected to total US$188 million.
It has an internal rate of return of 42 per cent and a 27-month payback period.
Vanadium Resources will proceed to project financing activities before making a final investment decision.
In addition, the company has updated the mineral resource (MRE) and ore reserve estimate for the Steelpoortdrift project.
The MRE now amounts to 680 million tonnes at 0.7 per cent vanadium pentoxide V2O5 which marks a 2.7 per cent increase.
The company noted the measured mineral resources increased by 58 per cent to 145 million tonnes at 0.72 per cent V2O5.
The ore reserves total 76.86 million tonnes at 0.72 per cent V2O5 with 30.23 million tonnes of proved ore reserves at 0.7 per cent V2O5 and 46.62 million tonnes of probable ore reserves at 0.72 per cent V2O5.
Vanadium Resources said there’s potential to increase the resource through further drilling.
A number of initiatives have been identified during the DFS to further improve costs and processing efficiencies.
Shares in Vanadium Resources were up 15.8 per cent, trading at 11 cents as of 3:32 pm AEST.
