Another recent Dr Reuter article (sponsored), (german translation by google). Note: another mention here of offtakes and /or financing timelines (my highlight in yellow).

https://www.onvista.de/news/2023/03-06-irw-news-dr-reuter-investor-relations-dr-reuter-investor-relations-china-vanadium-spielt-eine-immer-groessere-rolle-bei-den-klimazielen-10-26105771

Dr. Reuter Investor Relations - China: Vanadium is playing an increasingly important role in climate targets

03/06/2023

IRW PRESS: Dr. Reuter Investor Relations: Dr. Reuter Investor Relations - China: Vanadium is playing an increasingly important role in climate targets

Vanadium is playing an increasingly important role in China's decarbonization plans. The focus is on alloys for the aircraft industry and vanadium redox flow batteries as energy storage. Both trends are driving demand for the coveted commodity and creating opportunities for companies like Vanadium Resources.

Today, about 85 percent of the vanadium mined worldwide is used in the steel industry. It is not used in its pure form, since high purity is not required here, so that ferrovanadium can be used as a raw material. The advantage: Even small amounts of vanadium increase the strength and toughness of steel and thus its wear resistance significantly.

But the demand structure is gradually changing. And that also has to do with China's 14th Five-Year Economic Plan (2021-26). Because the Middle Kingdom wants to reduce its energy consumption and promote the expansion of renewable energies and energy storage. Because China's industry is still building primarily on climate-damaging coal.

Two applications play an important role here. First, there is the Chinese aerospace industry. With the Comac C919, it launched the first passenger aircraft developed in China in 2015. High-quality titanium-vanadium alloys have become one of the most important structural materials for aircraft and engines in aviation and are used in the C919. They serve to reduce the weight of the aircraft, increase their carrying capacity and reduce fuel consumption. Considering that China is the fastest growing aircraft market in the world, one understands the country's interest in bringing its own aircraft to the market. On the other hand, you want to achieve the climate goals. With more than 1,000 orders now for the C919, this is driving demand for titanium and vanadium. Figures prove this: The Chinese titanium alloy industry used around 2,600 tons of vanadium pentoxide equivalent (V2O5) as early as 2021. This corresponds to an increase of 54 percent compared to the previous year. Globally, the share of vanadium redox flow batteries in vanadium demand is expected to increase to 15 to 25 percent by 2025.

A similar dynamic for vanadium also comes from the field of energy storage. Thanks to the government's five-year plan, investment in vanadium redox flow batteries has picked up. They are considered a key element in achieving the climate goals. Because while China is constantly expanding its solar parks and wind turbines, it is important to be able to store unused energy. Some projects were already put into operation last year. This includes a 100MW/400MWh vanadium flow battery system that went online in the city of Dalian. A 250 MW/1 GWh plant has been under construction in Yili, northwest China, since the fall and is expected to be connected to the grid soon. Demand for vanadium (V2O5 equivalent) by vanadium redox flow batteries was estimated at 9,100 t in China in 2022. That is 88 percent more than in the previous year.

These developments will result in a significant boost for the demand side. Vanadium is actually not a rare metal. But there are few deposits where the steel-grey-bluish transition metal is found in concentrations high enough to make mining economically worthwhile. Vanadium Resources has such a deposit in South Africa. The Steelpoortdrift deposit is located in a well-developed mining complex north of Johannesburg, where major corporations such as Anglo American, Glencore or Sibanye-Stillwater operate mines. Steelpoortdrift is one of the largest and highest grade vanadium deposits in the world.

Vanadium Resources has completed a Definitive Feasibility Study for this deposit. Accordingly, the net present value of the planned mine operation is an impressive 1.2 billion US dollars. This is approximately six times the $211 million in capital required to bring the project online, making it a top metric in the mining sector. The other key figures are also convincing: An annual free cash flow of USD 152 million is expected. This income exceeds the company's total market value of around 28 million US dollars by a multiple. In the coming months, the management wants to work on the financing of the project and present an offtake partner.

Vanadium Resources

ISIN: AU0000053522

WKN: A2PPPU

https://vr8.global/

Country: Australia / South Africa

Disclaimer/Risk Warning

Conflicts of interest: A paid IR and PR contract exists with Vanadium Resources Ltd. The content of the services is, among other things, to increase the level of awareness of the company. dr Reuter Investor Relations is therefore acting in the interests of Vanadium Resources Ltd. in preparing and distributing the article. It is an advertising editorial representation.

Corporate risks: As with any company, there are risks with regard to the implementation of the business model. There is no guarantee that the business model can be implemented as planned. Further information on the Company's risks can be found on Vanadium Resources Ltd's Investor Relations website: https://vr8.global/All DYOR