- Vanadium Resources (ASX:VR8) boosts its stake in its flagship vanadium project to 81.9 per cent, a 7.95 per cent increase
- The company bought out a third party’s interest in a subsidiary
- That third party, called Obeec, now becomes a major shareholder
- The company reports its enhanced stake will make project financing easier down the line
- Shares last traded at 4.9 cents
South African-based Vanadium producer Vanadium Resources (ASX:VR8) has increased its ownership interest in the Steelpoortdrift project to 82 per cent.
The company’s interest has effectively risen by 7.95 per cent overnight, up from 73.95 per cent.
A further 4.59 per cent stake is set to be acquired in the near future, pending approval from the South African Reserve Bank.
Deal through subsidiary
Vanadium Resources describes Steelpoortdrift as one of the world’s “largest undeveloped vanadium deposits”.
It boasts a JORC resource of 680 million tonnes of ore at an average grade of 0.70 per cent vanadium, yielding 4.74 million tonnes of vanadium metal.
The company obtained this boost through the completion of a transaction with Obeec Pty Ltd, which sold its interests in a VR8 subsidiary back to the parent company.
In return, VR8 granted Obeec 14.03 million share options to acquire VR8 shares, which, upon exercise, represent 2.54 per cent of the issued capital. These shares are in escrow for 12 months.
Strategic win-win move
“We are pleased to have completed a transaction that provides significant value to both parties and aligns with the regulatory environment of the South African Government,” VR8 Executive Chair Jurie Wessels said.
“As a shareholder of VR8, Obeec 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.
“We also expect to complete the Mathpin transaction to bring VR8’s interest in VanRes to 86.49 per cent once it becomes unconditional.”
Mr Wessels also expressed that a higher ownership stake would enable VR8 to take greater control of the project with a particular view toward funding requirements down the line.
VR8 shares last traded at 4.9 cents.