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Highlights

  • Vanadium Resources signs MoU with China Precious Asia for monthly supply of 100,000 tonnes of vanadium-rich magnetite DSO.

  • The agreement supports early-stage revenue generation ahead of full-scale development at Steelpoortdrift.

  • VR8 continues to assess complementary strategic opportunities to maximise long-term project value.

Vanadium Resources Limited (ASX:VR8) witnessed a sharp rise in its share price, surging 157% to 3.6 cents on 17 June 2025, following the announcement of a Memorandum of Understanding (MoU) between its wholly owned subsidiary, Vanadium Resources (Pty) Limited (VanRes), and China Precious Asia Limited (CPAL).

The agreement outlines an in-principle understanding for the supply of vanadium-rich magnetite Direct Shipping Ore (DSO) from the Steelpoortdrift Vanadium Project in South Africa, marking a major milestone for Vanadium Resources as it moves toward generating early revenue and operational cashflows.

DSO Supply Agreement and Terms

Under the MoU, VanRes will supply CPAL with an average of 100,000 metric tonnes of magnetite ore per month. The ore will be collected and loaded by CPAL directly from VanRes. The monthly volume is subject to flexibility, with VanRes permitted to increase or decrease the quantity by up to 25%.

The commencement of the agreement is contingent upon two conditions precedent being met by 30 November 2025:

  1. Confirmation by VanRes that the supplied ore meets CPAL’s specifications.

  2. Finalisation of an agreement with a mining contractor on acceptable terms.

The agreement will terminate either once the total agreed quantity is supplied or two years from the commencement date, whichever comes first.

Early Monetisation Strategy for Steelpoortdrift

The Steelpoortdrift Vanadium Project hosts one of the largest and highest-grade undeveloped vanadium resources globally. The DSO initiative is part of Vanadium Resources’ strategy to unlock near-term value while maintaining long-term development flexibility. The company holds a fully permitted Mining Right over the Steelpoortdrift 365KT farm, facilitating immediate readiness for DSO operations.

This initiative enables VR8 to generate early cashflows and position itself as a near-term producer while leveraging its substantial JORC-compliant vanadium resource base, estimated to support more than 180 years of supply.

Strategic Alignment with CPAL and Market Demand

Founded in 2012, CPAL is a metals and minerals trading and processing company focusing on magnetite-bearing ore, particularly vanadium-rich sources, and servicing Asian steel markets. The MoU aligns with China's broader strategy to secure primary sources of vanadium for industrial and energy applications.

Broader Development and Expansion Plans

Alongside the DSO agreement, Vanadium Resources remains focused on maximising value from the Steelpoortdrift project. This includes plans for producing >98% V₂O₅ flake, 99.5% V₂O₅ powder, and various downstream products such as vanadium nitride, ferrovanadium, ammonium metavanadate (AMV), and vanadium electrolyte.