Why Has Vanadium Resources Extended Pricing Talks with CPAL?
Vanadium Resources Limited has extended the deadline to finalise pricing terms with China Precious Asia Limited, while progressing mining contractor discussions and pit optimisation at its Steelpoortdrift vanadium project.
- Addendum extends pricing agreement deadline to 30 September 2025
- CPAL representatives inspected Steelpoortdrift mining site and logistics
- VanRes advancing mining contractor selection and pit optimisation
- Mineral Resource and Ore Reserve estimates from 2022 remain valid
- Agreement remains subject to pricing, contractor appointment, and product specs
Extended Deadline Reflects Ongoing Negotiations
Vanadium Resources Limited (ASX, VR8) has announced an addendum to its Magnetite Ore Supply Agreement with China Precious Asia Limited (CPAL), extending the deadline to agree on pricing terms from 30 August to 30 September 2025. This extension acknowledges that final mining cost assessments are still underway, delaying the finalisation of pricing for the direct shipping ore (DSO) product.
On-Site and Overseas Engagements Signal Progress
CPAL representatives recently visited the Steelpoortdrift site in South Africa to inspect planned mining areas, stockpile locations, and logistics infrastructure. Meanwhile, VanRes Executive Chairman Jurie Wessels traveled to China to engage with CPAL’s team, reviewing blending and beneficiation operations, meeting end users, and discussing export logistics and scheduling. These interactions underscore the collaborative approach both parties are taking to ensure smooth operational integration.
Mining Contractor Discussions and Pit Optimisation
VanRes is actively negotiating with potential mining contractors, focusing on a pit optimisation program targeting starter mining areas. The goal is to confirm potential head grades and establish minimum DSO specifications. Priority is given to zones where geological conditions; such as massive homogeneous magnetite seams, high iron and vanadium grades, and favourable mining conditions; align to optimise extraction efficiency and cost-effectiveness. This preparatory work is nearing completion, after which contractors will provide detailed mining cost proposals.
Resource and Reserve Estimates Remain Unchanged
The company reaffirmed that its Mineral Resource and Ore Reserve estimates, reported in October 2022, remain current and valid. The Steelpoortdrift project holds a total mineral resource of approximately 680 million tonnes with an average vanadium pentoxide (V2O5) grade of 0.70%, and ore reserves of nearly 77 million tonnes at a similar grade. These figures provide a solid foundation for the project’s long-term production potential.
Conditions Precedent and Forward Outlook
The supply agreement with CPAL remains conditional on finalising pricing, appointing a suitable mining contractor, and ensuring the DSO product meets agreed specifications. While the extension provides additional time to resolve these elements, it also highlights the complexities involved in bringing the project into production. Vanadium Resources continues to emphasise the inherent risks and uncertainties typical of mining ventures, including market fluctuations and operational challenges.
Bottom Line?
As Vanadium Resources finalises key operational and commercial details, the coming weeks will be critical in shaping the Steelpoortdrift project’s path to production.
Questions in the middle?
- Which mining contractor will VanRes select and at what cost?
- How will the final pricing terms with CPAL impact project economics?
- What are the timelines for commencing mining and first shipments?
