Redzone Resources Ltd. [REZ-TSXV; REZZF-OTC; REZ-FSE] said Wednesday December 5 that it has agreed to acquire the Wells vanadium project in British Columbia.
Redzone is an exploration company with a focus on metals that make up and support the rapid evolution to battery power.
It is involved in three key projects. They are the Fortner Boyd lithium property in Arizona, the Lara copper project in Peru, and the North-West Leinster lithium property in Ireland.
The Wells vanadium project consists of two mineral tenures, which total 1,225 hectares and are located 20 km southeast of the restored historical town of Barkerville, east-central B.C. Access to the property is by 35 km of logging roads.
Previous work by a company formerly known as Cominco Ltd. analysed 44 rock samples, collected over a 2-km by 1-km area, for their vanadium content. The results are noted in a B.C. assessment report.
Eleven samples were found to contain greater than 1,000 ppm vanadium and values ranged up to 1,852 ppm (0.33% V2O5). The mineralization is found in phospatic black clastic sediments of the Black Stuart Formation.
Those results from previous programs were collected in the 1980s, prior to implementation of NI 43-101 reporting standards.
To acquire 100% of the Wells vanadium property, Redzone must pay $10,000 on signing and deliver 150,000 shares. Over the next four years, the company must pay another $90,000 cash and deliver 950,000 shares.
The property is subject to a 2% net smelter royalty that can be reacquired for $1 million. Redzone has the option to exit the purchase agreement at any time prior to the fourth anniversary.
Meanwhile, for Redzone, in year one of the agreement, the work program will involve resampling of the anomalous rock chip samples collected by the previous operator, follow up stream sediment sampling and ridge and spur soil geochemistry. Property access is expected by late May 2019.
Vanadium is growing in importance for key industrial manufacturing sectors, notably in steel and renewable energy. More than 85% of the world’s vanadium is used in steel manufacturing applications.
Its importance to the energy sector is also growing rapidly with more than 10% of vanadium production used in energy storage where its substantial cost and performance benefits make it an alternative choice to lithium ion in several areas.
In the last three years, Vanadium prices for 98% flake V2O5 have steadily risen from under US$2 a pound to $27.45.
Redzone shares moved lower on the news, falling 6.25% or $0.005 to 7.5 cents.Â The 52-week range is $0.08 and 75 cents.