By: OrePulse

A scoping study for Vanadium Resources' proposed V-Iron plant in South Africa has confirmed the project can viably co-produce iron and vanadium for supply to the United States and allied markets, the ASX-listed company said.

Under base-case pricing assumptions, the study put the project's after-tax net present value at $842 million, with an internal rate of return of 36% and a payback period of four years on total project capital. It estimated average annual earnings before interest, tax, depreciation and amortization of about $226 million, and total free cash flow of $4.4 billion over a 30-year operating life.

The proposed plant is designed to produce 603,000 tonnes a year of pig iron alongside 65,000 tonnes a year of vanadium-rich slag grading about 26.7% vanadium pentoxide, equivalent to 17,300 tonnes a year of contained vanadium pentoxide. Pre-production capital costs are estimated at roughly $400 million.

Vanadium Resources said the results support moving ahead to a definitive feasibility study, drawing on earlier mine and concentrator work as well as existing infrastructure at the Highveld Industrial Park. The company is seeking funding for that next study through talks with sovereign development finance institutions and strategic equity partners. Feedstock for the plant would come from the company's Steelpoortdrift project in Limpopo province, in which it holds an 86% stake.

Chairperson Jurie Wessels said: "The scoping study provides compelling preliminary validation of the company's decisive pivot to a pyrometallurgical co-production process." Chief executive Nick Diack said an offtake partnership with US Vanadium underpins 100% of the plant's planned vanadium-slag output, with the intermediate product shipped directly from South Africa to a US refinery.