Vanadium One Iron Corp. [VONE-TSXV] on Monday May 17 released an updated mineral resource estimate for its 100%-owned Mont Sorcier iron ore and vanadium project near Chibougamau, Quebec.
The company said the updated resource incorporates results from the 2020 drill program which focused on defining the eastern extension of the North Zone as well as some infill in the North Zone. This has resulted in an increase in the total inferred resource tonnage in the North Zone from 376 million tonnes to 809.1 million tonnes at 34.2% magnetite, an addition of 433 million tonnes or a 115% increase.
Total inferred resources for both the North Zone and South Zone are estimated at 953.7 million tonnes, grading 32.8% magnetite, with the potential to produce 313 million tonnes of magnetite concentrate grading 64% Fe and 0.6% vanadium pentoxide (V2O5).
Total indicated mineral resources remain unchanged and are estimated to be 113.5 million tonnes, grading 30.9% magnetite, with the potential to produce 35.0 million tonnes of magnetite concentrate, grading 65.3% Fe and 0.6% V2O5. Indicated mineral resources have only been estimated at the South Zone.
Vanadium One President and CEO Cliff Hale-Sanders said the company will now turn its attention to rapidly moving the Mont Sorcier project towards feasibility and ultimately production.
The company will also begin a new drill program shortly to convert a large proportion of inferred resources into higher confidence (indicated and measured). At the same time, the company will start initial base line, environmental studies, community consultations and other development activities.
Vanadium One shares fell on the news, easing 1.8% or $0.05 to 27.5 cents on volume of 108,010. The shares are trading in a 52-week range of 34 cents and $0.06.
The company recently entered into a long-term arrangement with a unit of Glencore Plc [GLEN-LSE] to support development of Mont Sorcier.
The parties have entered into a financing raising (FR) assistance agreement and a separate offtake agreement to support the ongoing development and eventual construction and production at Mont Sorcier.
Under the terms of the agreement, Glencore will assist Vanadium One in raising at least US$10 million, either directly or indirectly, in project financing to support the completion of a bankable feasibility study.
Such funding is to be secured by the end of 2021. Glencore is expected to facilitate the arrangement of at least US$8 million of this funding requirement. A portion of the proceeds will be dedicated for community agreements, related environmental studies and the initiation of a permitting process.
Upon the successful fulfillment of the FR agreement, Vanadium One will grant to Glencore an 8.0-year offtake agreement for 100% of the annual production from Mont Sorcier. The two companies have also negotiated a price participation agreement in the offtake for any premium secured above the Metal Bulletin 65% iron index price for a given quotational period for the product sold.
The Mont Sorcier project is a bulk-tonnage magnetite iron ore and vanadium deposit, with very low titanium content, allowing for the simple extraction of the vanadium metal by a blast furnace.