PERTH (miningweekly.com) – ASX-listed Mineral Resources Limited (MRL) will exit the Windimurra vanadium project in Western Australia, by selling its 27,5% interest in the project to Atlantic.

In April, the two companies announced that they would buy an effective 90% equity interest in Midwest Vanadium, the company that holds the Windimurra project, and that they would complete the construction and commissioning of the mine.

However, Atlantic has now agreed to buy MRL’s initially proposed interest in the project for A$16-million, while Midwest Vanadium would acquire the existing beneficiation plant from MRL for A$60-million.

MRL would also be repaid its A$9,4-million unsecured debt in Midwest Vanadium, on the completion of the transaction.

Atlantic said in a statement that the revised agreement represented a superior transaction outcome for Atlantic, while MRL would be able to fast-track the repayment of its existing unsecured debt position with Midwest Vanadium.

Atlantic MD Michael Minosora said that the company had previously proposed a funding package for Midwest Vanadium to complete the project construction and commissioning, and Atlantic was confident that its funding providers would find this revised agreement attractive, and would support the financing of Midwest Vanadium.

The previously announced A$55,5-million share placement to fund and commission the project would also proceed, said Minosora, subject to the consent of the investors.

“We believe that the Windimurra project is a high-quality project that can now deliver improved returns for Atlantic’s shareholders and for our funding providers, as well as be a major contributor to the Western Australia and Mount Magnet communities,” said Minosora.

MRL MD David Wade said that the revised agreement provided MRL shareholders with an “appropriate” return for the capital held in the project, since Midwest Vanadium went into receivership in February last year.

“The new structure provides certainty of outcome for MRL shareholders and also has the potential of providing Midwest Vanadium’s new shareholders with a positive return into the future.”

“The board of MRL considers that its exit from the Windimurra project insulates MRL shareholders from the historically volatile vanadium market and importantly, enables the cash flow generated from this transaction to be reinvested into our portfolio of well advanced iron-ore and manganese producing projects, and further expedites the development of other projects into production.”

The agreement, which was subject to existing lender approval, would most likely be finalised by August 16.

The Windimura project is said to be one of the world’s largest known vanadium deposits.

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