ASX-listed Vanadium Resources (VR8) has received approval from the South African government to receive transfer of an interest of 23.95% in the Limpopo-based tier-one Steelpoortdrift vanadium project, thereby increasing VR8’s interest to 73.95%.

As a result, VR8 will be receiving transfer of the remaining 23.95% of the issued shares in VanRes, which owns the project, and VanRes will become a subsidiary of VR8.

In July 2018, VR8 entered into a sale and purchase agreement with the vendors of VanRes for the acquisition of 73.95% of the issued shares in VanRes.

During September 2019 this transaction was completed up to the point of VR8 acquiring 50% of the issued shares in VanRes, thereby not attaining more than 50% and effective control of VanRes for which Department of Mineral Resources and Energy approval was required in terms of Section 11 of the Mineral and Petroleum Resources Development Act.

The increase in ownership comes at no cost to VR8 given all consideration shares for the acquisition of the asset were issued in September 2019.

VR8 executive chairperson Jurie Wessels says the approval by Mineral Resources and Energy Minister Gwede Mantashe has now cemented VR8’s control and ownership of the project, making it possible for VR8 to confidently prepare towards securing construction finance and attracting the right mix of financial partners and stakeholders.

Meanwhile, a definitive feasibility study (DFS) is under way at the project to undertake mining operations and to build a concentrator and salt roast plant, potentially capable of initially producing 12 500 t/y of vanadium pentoxide flake at an estimated capital expenditure of $200-million.

The DFS is expected to be completed by the third quarter, and will potentially enable VR8 to raise the requisite construction finance and to commence with exploitation and processing operations soon afterwards.