[SMM Flash News] Vanadium Resources, a subsidiary of VR8 listed in Australia, signed a two-year binding off-take agreement with China Precious Asia (CPAL), a Chinese trading company, to supply it with vanadium-rich magnetite ore from its South African project. According to the agreement, Vanadium Resources will supply CPAL with approximately 1.2 million mt of vanadium-rich magnetite ore annually. However, VR8 stated on July 22 that, given the lack of standard spot prices, it would finalise the pricing terms of the agreement with CPAL by August 30. It also needs to confirm the compliance of contractors participating in mining and product specifications by November 30.
The group owns the Steelpoortdrift project in the northern Limpopo Province of South Africa. The project has a total mineral resource of 680 million mt, with an average vanadium pentoxide content of 0.7%. VR8 plans to produce the first batch of concentrate and vanadium flake from July to December this year. However, it has started exploring the production of direct shipping ore (DSO) to monetise the project in the short term. The project has been suspended, and cost-reduction measures have been implemented as the company seeks "strategic equity partners or development options" to save the project. According to VR8's latest quarterly activity report, as of the end of March, VR8 and its subsidiaries held only A$218,000 ($141,700) in cash and cash equivalents.