Surefire Resources has executed a joint co-operation agreement (JCA) with Western Australia’s Mid West Ports Authority (MWPA) to define the best pathway forward for exporting magnetite product from the company’s Victory Bore operation.
Management’s aim is to secure enough access at the Port of Geraldton to be able to ship 1.25 million tonnes per annum to the Kingdom of Saudi Arabia (KSA), where the ore will be processed into a suite of valuable products. Surefire says the two parties are expected to work together to outline the optimum solution to providing the required tonnage capacity.
The supply-chain solution is vital to determining the all-important costs and movement of bulk quantities to enable a competitive mining venture for the company. It will allow it to kick off mining activities at its Mid West project and begin to realise value from its massive resource.
The JCA will explore the future use of facilities and services at the key Port of Geraldton hub, which is ideally placed to service the needs of Mid West-based mining enterprises. The end goal is to secure a contract arrangement that will lead to the provision of export facilities by the MWPA to enable Surefire to export its valuable commodity.
Surefire Resources managing director Paul Burton said: “The execution of this Joint Cooperation Agreement represents a step forward in our logistics chain and is another advancement of our future operation plans as we continue development of the Victory Bore Project.”
The Victory Bore vanadium-iron-titanium operation has a mineral resource of 464 million tonnes at 0.3 per cent vanadium oxide, 5.12 per cent titanium oxide and magnetite iron at 17.7 per cent. It boasts a reserve of 93 million tonnes at marginally higher grades and a concentrate grade of 1.43 per cent vanadium oxide following a beneficiation process to upgrade the material.
The project will produce magnetite concentrate at the site to ship to the KSA, where it will be processed to produce high-value products such as vanadium pentoxide, ferro-vanadium, pig-iron, iron oxide and titanium slag.
Surefire has developed a strategy that proposes a mineral processing facility in KSA to process magnetite concentrate from Victory Bore. The plan is for Victory Bore to be a low capital cost operation in Australia, with all of the value-added downstream processing using low-cost power and fuel that is provided within the KSA – which already boasts an emerging steel sector with a need for vanadium.
The plan has come with signed memorandums of understanding (MoUs) with the KSA Ministry of Investment (MISA) and two private Saudi companies within the past year. The MoUs have been put in place with a view to completing binding agreements for a 50:50 Saudi-Australian joint venture (JV) structure that will establish a framework for investment into Surefire’s vanadium-iron project.
The MoU with MISA also provides the company with a range of assistance measures, including finding suitable land for processing facilities, introducing it to potential partners and assisting with binding finance and development agreements.
The initial discussions were quickly escalated to MoUs as they followed the release of an impressive prefeasibility study (PFS) for Victory Bore, which projected a net present value (NPV) of US$1.1 billion (AU$1.64 billion), a life of mine of more than 24 years and an internal rate of return (IRR) for the project of 42 per cent – forecasting a project payback of 2.4 years.
The impressive PFS numbers were revealed last December using a 10 per cent discount rate.
Surefire is continuing to progress discussions with the KSA entities, as it looks to secure a partner with deep pockets who can buy into 50 per cent of both the project and the downstream processing operation. The company has also been negotiating on logistical options and costings to transport its concentrate from site to the Port of Geraldton, in addition to exporting to other destinations such as South Korea, Japan and China, subject to successful offtake discussions for the anticipated final product.
Management also disclosed yesterday that it has inked an agreement with DRA Global for a full-service engineering package to develop its 100 per cent-owned Victory Bore project.
The signed heads of agreement equips DRA with the task of moving the project from feasibility to construction and finally, into planned dual-country operations in Australia and the KSA.
Vanadium is a valuable critical mineral highly sought-after as an alloy to strengthen steel for use in products for the construction sector and also for armour-plating and making stronger automotive components such as pistons and crankshafts.
The pieces of the puzzle required to monetise the huge resource at its fingertips appear to be slowly coming together for Surefire.
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By Craig Nolan
