Mr. Adriaan Bakker reports
DEFINITIVE AGREEMENT SIGNED FOR ACQUISITION & SECURED OFFTAKE FOR VANADIUMCORP'S IRON-T VANADIUM PROJECT
On Oct. 18, 2019, Vanadiumcorp Resource Inc. entered into a definitive agreement, whereby a private Canadian corporation may earn a 100-per-cent interest in the company's Iron-T vanadium-titanium-iron project through a three-stage option. Should the project reach production, a first right of refusal is granted, allowing Vanadiumcorp to acquire up to 200,000 metric tonnes per annum (MTPA) of vanadiferous titanomagnetite (VTM) concentrate, as an offtake that is valid for life of mine.
"This agreement offers the potential of exclusive vanadium feedstock required for a Vanadiumcorp processing facility to enable a new vanadium redox flow battery (VRFB) industry in Quebec, Canada. VRFBs with Vanadiumcorp Electrolyte offer the lowest carbon footprint. VRFBs are uniquely suited to replace diesel for remote communities, build clean electric vehicle charging infrastructure, back up power to prevent blackouts, and enabling microgrids crucial for national security and modernizing the entire power grid with renewable infrastructure," commented Adriaan Bakker, chief executive officer of Vanadiumcorp.
The definite agreement contains a three-stage earn-in, where the private company will have the right to:
Earn a 75-per-cent interest on completion of $5-million (U.S.) of exploration expenditures and $1-million of cash and stock payments to Vanadiumcorp within the fourth anniversary of the signing of the definitive agreement;
- Earn an additional 10-per-cent interest on completion of a preliminary economic assessment;
- Earn an additional 15-per-cent interest on completion of a positive feasibility study.
The private company will become the operator and be responsible for continuing costs related to the project. The private company will have the right to accelerate the exercise of the earn-in by completing all the exploration expenditures and any outstanding cash and stock payments to Vanadiumcorp in a period shorter than the earn-in term.
Should the project reach production, the private company will grant Vanadiumcorp a right of first refusal to acquire: (i) 100,000 MTPA of the VTM concentrate at cost price; and (ii) 100,000 MTPA of a VTM concentrate market price, being agreed that the total concentrate (200,000 MTPA in aggregate) allotted to Vanadiumcorp cannot exceed a maximum of 10 per cent of total VTM concentrate tonnage established.
The development of a mining operation typically involves large capital expenditures and a high degree of risk and uncertainty. To reduce this risk and uncertainty, a production decision is typically based on a comprehensive feasibility study of established mineral reserves. The Iron-T project is a development-stage project, and no feasibility study of mineral reserves exists demonstrating economic and technical viability. As such, there is increased uncertainty and the specific economic and technical risks of failure associated with this production decision.
About Vanadiumcorp Resource Inc.
Vanadiumcorp Resource is an integrated company developing an exclusive supply chain for next-generation vanadium redox flow batteries.
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