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Steelpoortdrift vanadium project, South Africa – update

Image of vanadium ore from the Steelpoort project

Photo by Vanadium Resources

17th May 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Steelpoortdrift vanadium project.

Location
Limpopo, South Africa.

Project Owner/s
Vanadium Resources, or VR8 (86.49%).

Project Description
A definitive feasibility study (DFS) has reaffirmed Steelpoortdrift’s potential to be a world-class, large-scale and low-cost vanadium producer with competitive operating and capital expenditure (capex) metrics.

The project comprises the openpit mining of titaniferous vanadium ore and the primary treatment of run-of-mine (RoM) through an on-site concentrator, as well as the secondary treatment of concentrate through a salt-roast leach (SRL) plant to produce vanadium pentoxide flake exceeding 98%.

The DFS, completed in September 2022, has concluded that the project could produce 484 000 t of vanadium pentoxide flake over an initial 25-year life-of-mine (LoM), with total concentrate produced estimated at 29.08-million tonnes. Total RoM tonnes over the LoM is estimated at 80.32-million tonnes grading at about 0.71% vanadium pentoxide, with total waste tonnes estimated at 70.54-million tonnes.

The project will be built in two phases.

Phase 1 will operate from Year 1 to 4, based on a mining rate of 1.6-million tonnes a year of vanadium ore at an average in situ grade of 0.83% vanadium pentoxide, which will be processed through the concentrator and SRL plant to produce about 12 000 t/y of vanadium pentoxide flake.

Phase 2 will entail the expansion of the plant and increase the mining rate to 3.5-million tonnes a year of ore at an average grade of 0.71% vanadium pentoxide, with production almost doubling to about 21 000 t/y of flake.

The DFS further proposes the construction of a solar power plant, which is expected to reduce carbon emissions and carbon tax by 34%.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The September DFS estimates an after-tax net present value (NPV), at a 7.5% discount rate, of $1.21-billion and an internal rate of return (IRR) of 42%, with a payback of 27 months, compared with an NPV of $1.2-million tonnes, at a 7.5% discount rate, and an IRR of 45% in the June 2021 prefeasibiity study.

Capital Expenditure
Phase 1 capex is estimated at $211-million. Phase 2 capex is estimated at $188-million.

Planned Start/End Date
Construction is expected to start in March 2024, with mining and production scheduled to start at the end of the fourth quarter of 2024.

Latest Developments
VR8 has signed a memorandum of understanding (MoU) with China-based Hunan Zhongxin New Materials Technology for the offtake of 4 000 t/y of vanadium oxide over five years.

The nonbinding MoU states that Hunan can extend the offtake agreement by a further five years.

VR8 has secured three nonbinding MoUs in the past month, which exceeds 100% of the Steelpoort project’s Phase 1 output.

The other MoUs signed were with Panjin Hexiang New Materials Technology and Enerflow Technology, which are also based in China.

The competitive tension will enable VR8 to extract the best financing terms for supply from Steelpoortdrift, including potential for prepayment, corporate investment and project-level interest, it says.

This will minimise dilution and maximise project net present value for shareholders, it adds. 

Key Contracts, Suppliers and Consultants
Consulmet Metals (SRL plant); DRA Projects (photovoltaic plant); Minopex Technical Advisory (operational readiness); Nurizon Consulting (surface water, near surface geotechnical studies and tailings storage facility design); Red Kite Environmental Solutions and associated specialist consultants (environmental baseline studies and hydrogeology); Sound Mining International (geological modelling, mineral resource estimation, geotechnical studies for mining, openpit optimisation, mine design, scheduling and ore reserve estimation); SPH Kundalila (mining costing); Tenement Mining (compilation of DFS report); and UMS METS (concentrator plant).

Contact Details for Project Information
VR8, tel +61 8 6158 9990 or email contact@vr8.global.

Edited by Creamer Media Reporter

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