Surefire Resources has strengthened its growing ties with Saudi Arabia after signing a new agreement designed to assist in development and investment for its Victory Bore vanadium project in Western Australia’s Mid West region.
The non-binding agreement with Saudi-based RASI Investment allows both parties to explore a joint venture (JV) or co-developer structure to assist in potential downstream processing facilities for offtake from the project. Management says the deal allows the two companies to discuss terms for offtake agreements for any intended Victory Bore products. RASI, which already produces titanium slag and iron ingots, will also consider making significant investment into Surefire to become a major stakeholder.
The signing follows a previous – and similar – memorandum of understanding with Saudi-based Ajlan & Bros Mining and Metals Company that was announced earlier this year. The Ajlan arrangement is considered a precursor to a broader potential JV agreement that would see both parties jointly develop the project, with the concentrate to be shipped off to Saudi Arabia and broken down into multiple saleable products.
Surefire Resources managing director Paul Burton said: “This is another important step for the Company in its approach to developing the Victory Bore Project. This MOU will be worked through concurrently and further announcements will be provided once matters progress with RASI. We look forward to working closely with RASI along with our work with Ajlan.”
The company is assessing plans to produce up to six products from a processing facility in the Kingdom of Saudi Arabia (KSA) including high-purity vanadium pentoxide, ferrovanadium, pig iron, high-grade iron ore, high-purity iron oxide pigment and titanium slag.
In August last year, Surefire announced the completion of a memorandum of understanding with the Ministry of Investment Saudi Arabia (MISA) for the downstream processing of concentrate from Victory Bore.
That news was followed up by the tabling of a mammoth Victory Bore prefeasibility study in December that quoted a pre-tax net present value (NPV) of $1.7 billion and a 42.2 per cent pre-tax internal rate of return during a mine life of 24 years, with a payback of 2.4 years and a capital cost of $767 million.
The company has also recently released an updated mineral resource estimate for the project of 465 million tonnes at 0.3 per cent vanadium oxide, 5.1 per cent titanium dioxide and 17.7 per cent iron. The figure includes 16.4 per cent aluminium oxide and 36.2 per cent silicon oxide.
The latest resource builds on the previous estimate of 234.8 million tonnes at 0.39 per cent vanadium oxide. A maiden probable ore reserve of 93 million tonnes grading 0.35 per cent vanadium oxide, 5.2 per cent titanium oxide and 19.8 per cent iron was also released.
Concentrates are expected to be bulk shipped to the KSA for downstream processing into final high-value end products. Management says processing in the KSA has significant advantages, with lower operating and capital costs and a close proximity to markets. The KSA Government has proposed downstream processing to be located in one of the industrial hubs specifically designated for ferro-alloy processing.
The steel industry in KSA accounts for about 90 per cent of its total vanadium demand, where the silvery-grey metal is used as an additive to reduce the end-product alloy’s sensitivity to overheating and increases its strength and toughness to make it an ideal structural steel.
Surefire says the KSA is looking to transition away from its reliance on the oil and gas industry as battery manufacturing takes more of a central role to help meet looming carbon emission targets.
So, with a slew of agreements in place, the company appears to be in the box seat as development at Victory Bore continues to take shape.
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