Surefire Resources has inked an agreement with DRA Global for a full-service engineering package to develop its 100 per cent-owned Victory Bore vanadium-iron project in Western Australia’s Mid West region.
The signed heads of agreement (HoA) charges DRA – a tier-one international engineering group – with taking the Victory Bore project from feasibility to construction and finally, into planned dual-country operations in Australia and the Kingdom of Saudi Arabia (KSA). DRA is a mining, minerals and metals industry-focused group with important historic dealings in the KSA where Surefire intends to process its ore.
The KSA’s recent initiatives to diversify from oil and gas and develop future technologies came with an enticing proposal for companies looking to do business in that country. It included a promise to provide up to 75 per cent of the capital expenditure required for a company to bring a mineral processing project into operation.
As a result, the recently-developed Surefire strategy proposes a mineral processing facility in KSA to process magnetite concentrate from Victory Bore. 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.
Surefire’s plan for the Victory Bore operation is for a low capital cost operation in Australia, with value-added downstream processing and production of high-value products. All of the high-value-adding processing is to be carried out in the low-cost power and fuel jurisdiction of the KSA, which already boasts an emerging steel sector with a need for vanadium.
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 HoA follows 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 24years and an internal rate of return (IRR) for the project of 42 per cent –forecasting a project payback of 2.4 years.
Surefire Resources managing director Paul Burton said: “DRA Global provides a complete delivery package with the added advantage of experience in working on mineral processing projects in Saudi Arabia and in Vanadium processing. We look forward to working closely with DRA Global and the advantages that this brings to the Company and shareholders.”
The Victory Bore vanadium-iron-titanium project 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 beneficiation.
It is only sparsely understood that the vanadium grade after the concentration process is the most important aspect, not the in-ground grade. The company says its ore responds well to its planned beneficiation process, with the grade increasing more than three-fold and recoveries exceeding 90 per cent.
The KSA unveiled its Saudi Green Initiative (SGI) in early 2021, a bold national strategy for an almost entirely oil and gas-focused economy designed to combat climate change and protect the environment for future generations.
A large part of the strategy involves a renewable energy push that will incorporate vanadium redox flow batteries (VRFB). The VRFBs are largely preferred over their lithium ion counterparts because of the product’s ability to provide scalable, long-life and safe electricity storage.
The World Bank Group (WBG) recently released a report noting that with time, the demand for large volumes of stored energy will increase because of renewable power capacity development. It expects that VRFBs will provide an adequate long-duration energy storage solution in cases where large-pump hydropower is not feasible, such is the case in the KSA.
The vanadium market is dominated by steel and other metal production, with battery storage demand accounting for just 2 per cent of total consumption. However, the WBG believes battery storage demand is likely to increase rapidly in the next decade, reaching 10 per cent of total demand by 2030 and putting pressure on vanadium prices.
To meet the growing demand, the global vanadium supply will need to increase by about 6.9 per cent per year between now and 2030.
Surefire says its international process to seek funding and offtake for delivery of the project is ongoing, with several interested parties outlined in the KSA, Middle East and Europe.
Should the company find a funding partner in addition to the incentives available within the KSA, the project could progress from that of a somewhat stranded vanadium-iron asset in WA’s Mid-West, to a globally-significant metals operation in the KSA.
