Vanadium Resources Limited (ASX: VR8) has announced that its subsidiary, Vanadium Resources (Pty) Ltd (VanRes), has signed a non-binding Memorandum of Understanding (MoU) with China Precious Asia Limited (CPAL) for the supply of vanadium-rich magnetite Direct Shipping Ore (DSO) from its Steelpoortdrift Vanadium Project in South Africa. Under the terms of the MoU, VanRes would supply CPAL with an average of 100,000 metric tons of magnetite ore per month for a period of two years.
The agreement positions VR8 to become a near-term producer by monetising its substantial JORC resource base, while retaining flexibility to scale into full development as vanadium market conditions improve. CPAL, founded in 2012, is a metals and minerals trader and processor of magnetite-bearing ore, targeting Asian steel markets. Their focus on vanadium-rich magnetite ore aligns with China’s broader push to secure primary sources of vanadium.
VR8 Executive Chairman, Mr. Jurie Wessels, stated that the agreement presents a compelling opportunity to transition the company toward near-term production, even at this low point in the vanadium market cycle, facilitated by their advanced permitting status and the suite of valuable minerals within Steelpoortdrift’s ore.
The MoU outlines that the agreement will commence within 20 business days of VanRes confirming that the Product meets the required specifications and that it has concluded an agreement with a mining contractor. The agreement will terminate after VanRes has supplied 1.2MT per annum for two years or two years after the commencement of the agreement, whichever is earlier.
VR8 is also evaluating other strategic opportunities, including potential acquisitions that may complement the Steelpoortdrift development, focusing on value accretion and synergies. These opportunities are not mutually exclusive with the potential for a DSO operation. The Steelpoortdrift project boasts one of the world’s largest and highest-grade undeveloped vanadium resources, giving VR8 a significant competitive advantage.
