Vanadium Resources (VR8) has flagged plans to bolster its interest in the Steelpoortdrif vanadium project in South Africa to 86.49 per cent from 73.95 per cent.
VR8 has inked two separate sale and options agreements with Steelpoortdrift co-owners Obeec and Math-Pin Trust to snap up an extra 12.54 per cent interest in VanRes, which controls the project.
Vanadium will pay R8730 (A$710) in cash and issue the sellers more than 22 million share options in return for the increased interest.
Both companies are Black Economic Empowerment (BEE) parties and comply with the South African government’s minimum ownership requirements.
Meanwhile, Vanadium Resources has also signed a $5.91 million investment and offtake exclusivity deal with a subsidiary of China-based Zhejiang Lygend Investment, Matrix Resources.
Under the agreement, Matrix will snap up a 9.99 per cent interest in VR8 and will be given a four-month exclusivity period to negotiate and draw up potential offtake deals for vanadium products from Steelpoortdrift.
The offtake agreement will be limited to a 10-year production period for phase I of the project and includes 40 per cent of the product produced from the project.
“We are very much looking forward to investigating the potential ways to work together with Matrix to advance the development of the Steelpoortdrift vanadium project into a definitive mutually beneficial relationship aimed at progressing the project towards final investment decision,” VR8 Executive Chairman Jurie Wessels said.
Matrix will subscribe for 53,763,800 shares at an issue price of 11 cents per share, representing a 40 per cent premium to VR8’s 30-day volume-weighted average price (VWAP).
The funds from the strategic investment will be used to progress front-end engineering design (FEED) studies and complete additional technical work, which moves the company toward its final investment decision (FID).
VR8 shares were up 14.67 per cent and trading at 8.6 cents at 3:52 pm AEST.
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