Vanadium Resources (ASX:VR8) Ticks Boxes For Steelpoortdrift In Q1 Fy23

During the September quarter, Vanadium Resources (VR8) progressed activities to support its Steelpoortdrift mine in Limpopo, South Africa.

In August, the company entered an option agreement with Kadoma Investments to acquire a 135-hectare industrial site for ZAR33.5 million (A$2.9 million) within 15 kilometres of the Steelpoortdrift mine site.

Vanadium Resources believes the site is the “ideal” location for its proposed salt roast plant as it’s within 15 kilometres of the Steelpoortdrift mine site and is also in proximity to planned mining operations and good infrastructure.

Acquiring this property means the company will operate two sites to support its businesses with one focused on mining and initial beneficiation and the other on extraction, refining and production.

Vanadium Resources also appointed UK-based HCF International Advisors as its financial advisor to help arrange debt finance for the development of the Steelpoortdrift project.

At the start of October, the materials stock announced the outcomes of a definitive feasibility study (DFS) which confirmed Steelpoortdrift to be a “world class” project and low-cost vanadium producer.

The project is forecast to produce 484,000 tonnes of vanadium oxide flake over 25 years with a post-tax net present value of US$1.21 billion (A$1.9 billion at the time).

Pre-production capital expenditure is expected to be US$211 million with a payback period of just 27 months.

As part of the DFS, the mineral resources increased by 2.7 per cent to 680 million tonnes at 0.7 per cent vanadium pentoxide at a cut-off grade of 0.45 per cent.

Of this, the measured resources portion increased by 58 per cent to 145 million tonnes at 0.72 per cent vanadium pentoxide.

In terms of quarterly expenditure, the company spent $812,947 on exploration and development, which mainly went towards the DFS.

VR8 shares were down 2.67 per cent to close at 7.3 cents.

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