Vanadium Miners Close 2012 with Financing Deals

Battery Metals

A number of vanadium-focused companies ended 2012 strongly, bringing in important financing dollars.

Privately financed Canadian iron-vanadium developer BlackRock Metals will sell up to 25 percent of itself to Oman Oil Company (OOC), according to reports that emerged over the holidays.

The deal calls for OOC to invest an undisclosed amount into BlackRock; the Middle Eastern company will also be granted offtake rights, subject to negotiation of final terms.

The investment agreement was signed between the two companies in Muscat on December 17.

BlackRock is developing the BlackRock iron-vanadium-titanium project, which is located in the Chibougamau area of Quebec and covers 4,406 hectares. BlackRock hosts over 250 million metric tons (MT) of ore reserves grading 25.6 percent iron and 0.38 percent vanadium pentoxide, according to reports from the Quebec government.

A recently completed feasibility study on the BlackRock project shows that the operation is capable of producing 3 million MT per year of iron concentrate containing vanadium and titanium. The open-pit project has a forecast mine life of 14 years, with a capital cost of $600 million.

“We are pleased to announce our latest investment and first in Canada,” the Oman Tribune cited HE Nasser bin Khamis Al Jashmi, undersecretary of the Ministry of Oil and Gas and board chairman of OOC, as saying. “Additionally, OOC’s ability to off-take a proportion of BlackRock’s concentrates will support metal-based industrial projects in Oman.”

That is the second international financing and offtake agreement that BlackRock has completed. In January 2011, the company signed an agreement with AIM-listed Prosperity Minerals Holdings (LSE:PMHL), a China-based iron ore trading business.

Prosperity agreed to invest an initial US$8 million in BlackRock to secure offtake of 800,000 MT of iron over a two-and-a-half-year period.

In July 2011, Prosperity invested a further US$32 million in the company to up its offtake rights to 4 million MT over four years.

American Vanadium, MacDonald Mines receive financing

American Vanadium (TSXV:AVC,OTCQX:AVCVF) is one of a number of vanadium companies that took advantage of the resurgent vanadium price to raise funds.

The company announced on December 21 the closing of a non-brokered private placement of 2,554,999 units at a price of $0.65 per unit for total gross proceeds of approximately $1,660,749.

The financing closed just days before the company announced the submission of a plan of operations for its Gibellini project in Nevada. The plan, which covers mine design, processing facilities and reclamation, was submitted to the US Bureau of Land Management and initiates the National Environmental Policy Act review process.

On December 28, Colombian uranium-vanadium-REE developer U3O8 (TSX:UWE,OTCQX:UWEFF) announced the closing of a first tranche of financing, raising gross proceeds of $846,194 through the issue of 3,846,337 units at $0.22 per unit.

Follow-on tranches of the financing are expected to raise a total of approximately $3 million. Proceeds will be used to build on a recent preliminary economic assessment for the company’s Berlin uranium, phosphate, vanadium and rare earths (yttrium and neodymium) project.

MacDonald Mines Exploration (TSXV:BMK,OTCQX:MCDMF) also got in on the financing action, announcing on December 29 the closing of a non-brokered private placement that raised gross proceeds of $750,000 through the sale of flow-through units at $0.075 per unit.

MacDonald is pursuing a number of commodities, including vanadium, in the Ring of Fire area of the James Bay Lowlands of Northern Ontario.

Australia and China also active

Australian markets also saw investors kicking in money for vanadium projects, with Fortunis Resources (ASX:FOT) raising AU$2.8 million in a December 19 initial public offering.

Fortunis holds a farm-in agreement to earn up to a 51-percent interest in 63 square kilometers at the southern end of the Barrambie Greenstone Belt, which is prospective for gold, copper and vanadium-titanium-iron.

Elsewhere in international markets, China Vanadium Titano-Magnetite Mining (HKEX:0893) reported on December 19 that its wholly-owned subsidiary, Huili Caitong, issued a short-term commercial paper in China for a total registered principal amount of up to RMB700 million (US$112.5 million). The company owns and operates four vanadium-bearing titanomagnetite mines in China.


Securities Disclosure: I, Dave Forest, hold no direct investment interest in any company mentioned in this article.

The Conversation (0)