By Australian Vanadium Limited (ASX: AVL, “the Company” or “AVL”) has signed a new option agreement (“New Option Agreement”) with the land owner of the proposed location for its vanadium processing plant (“Processing Plant”) at Tenindewa, 60km east of Geraldton in Western Australia, for the Australian Vanadium Project (“Project”).
KEY POINTS
AVL has signed a new option agreement to purchase land to locate its processing plant at Tenindewa, 60km from the port city of Geraldton in Western Australia.The new option agreement allows AVL to subdivide and purchase a portion of the land under option, in order to locate and construct a vanadium processing plant, subject to planning approvals.The site’s location enables the utilisation of existing natural gas, water, road, rail and power infrastructure.
The New Option Agreement relates to an area of 1,334 acres, with a purchase price of $4,000 per acre (“Purchase Price”), reflecting current market prices in the region. The Purchase Price is payable in either cash or shares in the Company, or a combination of both, at the owner’s election. The number of AVL shares to be issued, if any, will be determined by using the 5-day VWAP immediately preceding the date of payment.
CEO, Graham Arvidson comments, “AVL is pleased to have worked with the landowners of the Tenindewa processing plant location to establish an option agreement which benefits both parties. We continue to progress our ‘pit to battery’ strategy as we move the Project towards production.”
The New Option Agreement provides for two 12 month option terms. The option fee for the first option term of $53,360 (plus GST) is payable immediately in cash. AVL may exercise the second option term by issuing notice and paying the second option fee by 4 September 2024. The option fee for the second option is to be paid in shares in AVL with the value of $53,360 (plus GST), with the number of shares to be determined as for the first option.
The consent of the Western Australian Planning Commission is required to subdivide the Option Land. Under the New Option Agreement, AVL is granted a licence to access the Option Land immediately for the purpose of drilling, engineering, surveying and excavation.
The New Option Agreement also contains provisions allowing AVL to lease back to the landowner those parts of the Option Land that AVL does not intend to use for the Project, or to sell back the Option Land to the landowner at the Purchase Price in certain circumstances.
The Project’s minesite is located approximately 40km south of the mining town of Meekatharra in Western Australia. AVL will undertake crushing, milling and beneficiation of vanadium bearing magnetite ore at the minesite location and transport the resulting concentrate to the proposed Processing Plant near Geraldton, where final refinement to high-quality, high-value vanadium products and an iron-titanium coproduct will take place.
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