[Ferro-Alloys.com] VANADIUM RESOURCES OFF-TAKE MOU WITH LARGE VANADIUM NITRIDE PRODUCER

 HIGHLIGHTS

VANADIUM RESOURCES LIMITED (ASX: VR8; DAX: TR3) (“VR8” or the “Company”) enters into a Memorandum of Understanding (“MOU”) with Panjin Hexiang New Materials Technology Co., Ltd. (“Hexiang”)

Hexiang is one of China’s largest vanadium nitride producers

The MOU envisions the purchase of 4,000 tonnes per annum of vanadium pentoxide (V2O5) for an initial 5-year term with an option to extend for a further 5 years

The MOU represents approximately 37% of VR8’s planned V2O5 production in Phase 1

This MOU underlines the continued demand for vanadium products in the mainland China market

VR8 is concurrently in discussions for further offtake MOUs and agreements with Chinese, Japanese, Korean and European end-users and traders for the balance of its planned production in Phase 1 of approximately 7,000 tonnes per annum

 Vanadium Resources Limited (ASX: VR8) is pleased to announce that it has signed an MOU for production from its Steelpoortdrift and Tweefontein vanadium operations in South Africa.

The non-binding MOU provides for the supply of 4,000tpa of V2O5 flake over a period of five years with an option for Hexiang to extend a further five years. This represents approximately 37% of VR8’s planned annual V2O5 flake production capacity of ~11,000tpa1 for the initial Phase 1 operation. The MOU with Hexiang provides a framework for further negotiations in relation to price, product quality and other offtake parameters.

Commenting on the MOU, Mr John Ciganek, Chief Executive of VR8 said:

“Through this strategic MOU, VR8 has provided additional evidence in support of our progress in the project debt and equity markets. VR8 is attracted to Hexiang’s processes to take vanadium pentoxide and produce vanadium-nitrogen alloys for use in the steel industry which forms the majority of the vanadium market. VR8 retains production capacity to explore offtakes in other locations or into the vanadium redox flow battery (“VRFB") market. Hexiang recognises the strategic value of the Steelpoortdrift and Tweefontein Vanadium Project based on its size, low CAPEX, lowest quartile OPEX, location, access to infrastructure and advanced stage of development. We are very much looking forward to converting the MOU into an Offtake agreement“.

ABOUT HEXIANG

Panjin Hexiang New Materials Technology Co., Ltd. was established in 2018, is located in Panjin City, Liaoning Province. Hexiang is predominantly engaged in the production and sale of vanadium-nitrogen alloy materials, non-ferrous metals and chemical products. Hexiang has grown into one of China’s largest vanadium-nitrogen alloy manufacturers with an annual production capacity of 3,200 tons of vanadium-nitrogen alloy products.

Vanadium-nitrogen alloy is an alloy additive that can replace ferro-vanadium for the production of micro-alloyed steel. The addition of vanadium nitride to steel can improve its mechanical properties, such as strength, toughness, ductility and thermal fatigue resistance, and enhances its weldability. To achieve the same strength, adding vanadium nitride saves 30-40% of the vanadium content2 (as compared to ferro-vanadium), thereby reducing costs. Vanadium-nitrogen alloy is used in structural steel, tool steel, pipe steel, steel bars and cast iron.

Hexiang is a major supplier to the surrounding steel mills with long-term cooperative relationships with a number of well-known Chinese steel groups ensuring stable sales. It is also a major vanadium pentoxide importer and exporter in China, with all the necessary licences and established connections with existing producers. Hexiang is ISO 9001 certified and its products are exported to Europe, India, the UAE and other countries.

Hexiang has strong technical skills and leading equipment patents. In cooperation with experts and professors from top domestic universities, the company has developed and produced kinds of vanadium-nitrogen alloys, using vanadium pentoxide as the raw material. The production process has been developed to an internationally advanced level with two vanadium-nitrogen alloy equipment production lines including nitrogen protection technology from CETC48 fully automatic push plate kilns, for which Hexiang has obtained national patents in China. The company’s facilities cover an area of 40,000 square metres.

This announcement has been authorised for release by the directors of Vanadium Resources Limited. 11 April 2024

• [Editor:tianyawei]