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Vanadium Resources seals a deal to secure Steelpoortdrift’s future

11 October 2021
Rueben Hale

Vanadium Resources Limited is busy making a big splash in South African mining circles. The ambitious Australian miner has just secured a significant strategic investment from a key South African infrastructure development and materials supply group and entered into a mining services agreement to conduct mining operations in South Africa.

Perth-based Vanadium has entered into a subscription agreement with a subsidiary of Johannesburg Stock Exchange listed Raubex Group Ltd to place $4.6 million at $0.104 per share, representing a significant premium Vanadium’s 15 and 30-day volume-weighted average price.

In exchange for the investment, Vanadium has entered into an arms-length mining services agreement with another Raubex subsidiary to provide contract mining services at Vanadium’s Steelpoortdrift vanadium project in the Limpopo province of South Africa.

“We are very pleased with the belief shown in our operations by a company of the calibre of the Raubex Group,” Vanadium chairman Jurie Wessels said.

“The untouched large high-grade resource at Steelpoortdrift has attracted significant attention from industry participants. This created strong support for the Company to close its first strategic investment with a business that understands mining in South Africa.”

Vanadium’s Steelpoortdrift project is potentially the largest vanadium mine in the world. The significant titaniferous magnetite deposit is located in the prolific Bushveld geological complex surrounded by known mineral and vanadium production facilities.

The Steelpoortdrift project is licensed with a mining right. The company is working towards producing high purity vanadium oxide flake at the site.

When fully operational, the Steelpoortdrift project is expected to produce a high-quality concentrate containing approximately 2.2 per cent vanadium oxide, 12 pc titanium dioxide and 58 pc iron.

Vanadium is used to strengthen steel via various alloys. The most commonly traded vanadium product is 98 pc vanadium oxide flake, which currently trades at $US8.10 per pound.

Raubex will take 44,230,769 shares in Vanadium in two tranches. The first is a 15-day volume-weighted average price approximately equal to $0.067, representing a 55 pc premium at $0.104c. The second is a 30-day volume-weighted average price approximately equal to $0.063, representing a 64 pc premium at $0.104.

Vanadium’s Jurie Wessels calls this a significant price premium that will allow the company to further develop its Steelpoortdrift project.

The freshly minted mining services agreement is Vanadium’s chosen development vehicle. Raubex’s subsidiary will provide contract mining services, including drilling, blasting, haulage, stockpile management, backfilling and supply of equipment to conduct relevant activities at Steelpoortdrift.

“The Company is well-positioned to capitalise from its world-class asset and will continue to ensure that the right mix of funding mechanisms is secured to realise the intrinsic potential of Steelpoortdrift,” Mr Wessels adds.

With a current cash position of $6.1 million, Vanadium says it is fully funded and comfortably situated to continue seeking interest for off-take and construction finance.

 The company’s Australian Stock Market listed price is trading at 7.0c today (4:15 am GMT + 8 hours).

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