A definitive feasibility study (DFS) into the Steelpoortdrift vanadium project, in Limpopo, has confirmed the project’s economics, ASX-listed Vanadium Resources said this month.

The Steelpoortdrift project involves the openpit mining of an initial 1.6-million-tonne-a-year of vanadium ore at an average head grade of 0.83% vanadium oxide during the first four years of operation, primary treatment of run-of-mine (RoM) through an on-site concentrator, secondary treatment of 0.72-million tonnes a year of concentrate through a salt roast leach (SRL) plant and final sale of 12 000 t/y vanadium flake at a grade of greater than 98%.

By year five, and for the remaining life of mine (LoM), the mining rate will increase to 3.5-million tonnes a year at an average head grade of 0.71% vanadium, with increased processing capacity almost doubling production rates of 1.25-million tonnes a year of concentrate and 21 000 t/y of flake.

The DFS estimated that the project would require a capital investment of$211-million to support yearly average flake production of 19 400 t/y over an LoM of 25 years, with an additional 67 years LoM readily available in the designed openpits.

Expansion capital of $188-million will be required between years three and five of the operation, and will be funded through free cash flows.

At the current throughput rates, the life of mineral resource for the openpits has been estimated at more than 180 years.

Based on the 25-year mine life, the DFS estimated a post-tax net present value of $1.21-billion and an internal rate of return of 42%, with operating costs estimated at $3.24/lb at current vanadium oxide prices.

“The company is pleased to bring a successful DFS to the market that underpins all previous results reported. The highly professional independent project team involved with compiling this report has done excellent design and planning work to reduce the impact of a highly challenging market environment in terms of inflationary pressures. This has been achieved through focused value and efficiency engineering initiatives that have been implemented,” said Vanadium Resources CEO Eugene Nel.

“With the majority of project costs, both in terms of operating cost as well as capital cost being procured locally, inflationary effects in these areas have been minimised to approximately 5% for both compared to the prefeasibility study, which maintains the Steelpoortdrift project’s status as one of the world’s lowest-cost producers to potentially come into production. It is our belief that the project outcomes deliver the values required to progress this project into construction phase and to become the next major vanadium producer globally.”

Vanadium Resources is expected to take a final investment decision by July next year, with construction expected to start in March 2024. Mining and production are slated to start at the end of the fourth quarter of 2024.