Vanadium mission earns timely tax offset for Surefire

ASX-listed Surefire Resources will commit a tidy $454,000 tax rebate towards extending its research and development activities at its Victory Bore vanadium project in Western Australia’s Mid West region.

The tax rebate relates to the company’s processing technology results and high-purity alumina testwork at the operation that includes a “breakthrough” metallurgical process which yielded extraction rates of 91 per cent vanadium and 88 per cent titanium. Additional research and development (R&D) activities included in the offset involve management’s confirmation of 99.99 per cent pure alumina in testwork using waste rock from its 100 per cent-owned Victory Bore vanadium deposit.

The funds were delivered through the Federal Government’s Research and Development tax incentive scheme. It allows companies with a turnover of less than $20 million and which undertake R&D activities to collect a cash refund of 43.5 cents per eligible dollar spent.

Surefire’s extraction breakthrough refers to its provisional patent application relating specifically to a new “pre-leach” treatment it has developed for application to its magnetite concentrate, which then allows the leachant to recover vanadium more effectively from the concentrate.

The remarkable vanadium extraction rate of 91 per cent followed a 96-hour leach applied directly to the pre-treated magnetite concentrate, which also yielded an unexpected 88 per cent recovery of titanium.

In December last year, the company tabled an impressive prefeasibility study (PFS) for Victory Bore 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 (IRR) during a mine life of 24 years, with a payback of 2.4 years and a capital cost of $767 million.

Surefire 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.

Management 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 (MoU)with Saudi Arabia’s Ministry of Investment for the downstream processing of concentrate from Victory Bore.

In January, it also signed a MoU with Saudi-based Ajlan & Bros Mining and Metals Company that would see both parties jointly develop the project, with the concentrate to be shipped off from WA to Saudi Arabia and broken down into multiple saleable products.

Two months later, the company made a non-binding agreement with Saudi-based RASI Investment, allowing 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.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au