Name of the Project
Steelpoortdrift vanadium project.

Location
Steelpoortdrift is situated in the Bushveld Complex, in Limpopo, South Africa.

Project Owner/s
Vanadium Resources Limited (VR8 – 86.49%).

Project Description
Steelpoortdrift has the potential to be a world-class, large-scale and low-cost vanadium producer with projected bottom-quartile global operating costs and capital expenditure (capex) metrics. The project comprises the proposed Steelpoortdrift mine and concentrator, as well as the Tweefontein salt roast leach (SRL) operation.

The project entails the openpit mining of titaniferous vanadium ore and the treatment of run-of-mine (RoM) ore through an on-site concentrator, as well as the secondary treatment of concentrate through an SRL plant.

A definitive feasibility study (DFS), released in October 2022, concluded that the project could produce 484 000 t of vanadium pentoxide (V₂O₅) flake over an initial 25-year life-of-mine (LoM), with total concentrate produced estimated at 29.08-million tonnes.

Total RoM ore and waste tonnes over the LoM are estimated at 80.32-million tonnes and 70.54-million tonnes respectively, giving the project an attractive strip ratio of 0.88.

Steelpoortdrift’s total Joint Ore Reserves Committee-compliant resource is estimated at 680-million tonnes grading 0.70% V₂O₅. Consequently, there is potential for the project to support a 180-year mine life at the proposed mining rates.

The October 2022 DFS illustrates how the project could be built in two phases.Phase 1 (Years 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% V₂O₅, will be processed through the concentrator and SRL plant to produce 11 000 t/y of 98% V₂O₅ 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% V₂O₅, with production almost doubling to 21 000 t/y of 98% V₂O₅ flake.

Potential Job Creation
Once the project has been funded, the project will create a range of job opportunities through the construction stages and then into production. The job opportunities will be open to potential employees from within South Africa, the local region and the affected communities directly surrounding the project, including senior management, and skilled technical, semi-skilled and unskilled workers.

Net Present Value/Internal Rate of Return
The October 2022 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 of 42%, with a payback of 27 months.

Capital Expenditure
The October 2022 DFS outlined Phase 1 capex of about $211-million, and Phase 2 capex of about $188-million.

Planned Start/End Date
Construction is expected to start during the first half of 2025, with production scheduled to start during the second half of 2026/first half of 2027.

Latest Developments
VR8 announced in June 2024 that it had chosen to modify the back end of the SRL processing plant to produce 98% V₂O₅ for the steel market and 99.5% V₂O₅ for the vanadium flow battery market. This modification has been made in response to higher-than-expected demand for higher-purity forms of V₂O₅ required by the vanadium flow battery market. The final split between 98% and 99.5% V₂O₅ produced is yet to be determined and will be driven by finalised offtake agreements. This modification is expected to enhance realised sales pricing by targeting higher-purity forms of V₂O₅. Consequently, VR8 believes that the likely overall net effect of these changes will result in an enhancement in after-tax NPV when compared with the DFS (all else remaining equal).

VR8 remains in discussions with a range of parties across China, Japan, Korea, North America and Europe with regard to further potential offtake agreements, strategic equity interest, engineering, procurement and construction (EPC), and financing.

Key Contracts, Suppliers and Consultants
VR8 has engaged a project management consulting firm to assist with overall project execution, including finalising detailed designs/front-end engineering design and the management of an EPC tender process. This will involve finalising material contracts that will include the completion of remaining detailed design work, as well as the provision of fixed-price, target schedules and performance guarantees for the project. Work has started on preparing these tender packages, which will be issued under a competitive tender process.

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