A scoping study on ASX-listed Vanadium Resources' proposed V-Iron plant, in South Africa, has confirmed the potential for a long-term source of vanadium raw material supply to the US and allied markets.

At base case prices, the V-Iron development has an after-tax net present value of $842-million, an internal rate of return of 36% and a projected total project capital payback period of four years.

The plant can generate average yearly earnings before interest, taxes, depreciation and amortisation of about $226-million and $4.4-billion of free cashflow over its 30-year lifetime.

The proposed V-Iron plant targets nameplate production capacity of 603 000 t/y of pig iron and 65 000 t/y of vanadium-rich slag grading about 26.7% vanadium pentoxide for 17 300 t/y of contained vanadium pentoxide.

The scoping study contemplates pre-production capital costs of about $400-million.

Subject to funding, the scoping study supports the advancement to a definitive feasibility study (DFS), leveraging prior mine and concentrator work, infrastructure at the Highveld Industrial Park and established precedent for vanadium-iron co-production.

Vanadium Resources is now focused on securing funding for the DFS, including through discussions with sovereign development finance institutions and strategic equity partners.

The feedstock for the V-Iron plant will be derived from the Steelpoortdrift mining project in Limpopo, which is 86%-owned by Vanadium Resources.

For chairperson Jurie Wessels, the scoping study provides compelling preliminary validation of the company's decisive pivot to a pyrometallurgical co-production process, which Wessels believes offers greater robustness, reliability and long-term optimisation compared with hydrometallurgical methods currently relied on by most western hemisphere vanadium producers.

CEO Nick Diack adds that Vanadium Resources' developing offtake partnership with US Vanadium anchors 100% of the planned vanadium-slag production, with a usable intermediate product poised to move directly from South Africa to a US refinery without passing through, or depending on any, adversarial jurisdiction.

"That secure and transparent route to market enhances the strategic value of Steelpoortdrift and, in our view, makes financing considerably more achievable with development finance institutions and partners holding critical-minerals mandates.

"Our immediate priority is securing funding to advance directly to the V-Iron DFS. These results will form the basis of progressing funding, offtake and strategic partnerships," Diack concludes.