Vanadium One Iron Corp., Toronto, Canada, (TSXV:VONE), has entered into a long-term arrangement with a wholly owned subsidiary of Glencore plc, Baar, Switzerland, to support the development of the Mont Sorcier Iron and Vanadium project located in Chibougamau, Quebec, Canada. The parties have entered into a Finance Raising Assistance Agreement (“FR Agreement”) and a separate Concentrate Offtake Agreement “Offtake Agreement”) to support the ongoing development and the eventual construction and production of the Mont Sorcier iron and vanadium project.
Cliff Hale-Sanders, President and CEO stated “We are extremely pleased to be entering into this long-term relationship with Glencore; one of the world’s largest commodity traders in both the iron ore and vanadium markets. We believe this partnership offers shareholders, not only a way to expedite development, but also the best opportunity to maximize the value of future production utilizing Glencore’s worldwide reach, thus unlocking the robust potential we see at Mont Sorcier as outlined in our Preliminary Economic Assessment. With Glencore’s support, we plan to deliver a Bankable Feasibility Study at Mont Sorcier.” He continued, “Our preference would be to find a strong technical and financial partner who can help us maximize the value chain as we bring Mont Sorcier to production, that said, we have the very capable technical nucleus to commence our journey.”
Under the terms of the FR Agreement, Glencore will undertake to assist Vanadium One in raising not less than US$10 million, either directly or indirectly, in project financing to support the completion of a Bankable Feasibility study on the Mont Sorcier project. Such funding is to be secured no later than year end 2021. Glencore is expected to facilitate the arrangement of at least US$8MM of this funding requirement. The structure of such financing remains to be determined through negotiations and on terms acceptable to Vanadium One. The use of proceeds will be used to deliver the feasibility study, upgrading the classification of the resource, enhanced metallurgical test work and project engineering. In addition, a portion of the proceeds will be dedicated for community agreements, related environmental studies and the initiation of the permitting process.
Upon the successful fulfillment of the FR Agreement, Vanadium One will grant to Glencore an eight (8) year Offtake Agreement for 100% of the annual production from the Mont Sorcier iron and vanadium project. The key terms of the Offtake Agreement are as follows:
• Initial term of eight (8) years, extendable by mutual agreement, for 100% of annual vanadium rich iron concentrate produced;
• Glencore will be granted a life of mine offtake agreement if it provides equity or debt funding for project construction on terms acceptable to Vanadium One;
• Vanadium One retains the right to claw back 50% of the annual offtake, if needed, to secure project development funding; and
• In order to secure the best price possible for the vanadium contained within the iron concentrate, Glencore and Vanadium One have 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. Glencore is obligated to use commercially reasonable endeavours to secure a value for the contained vanadium.
About Glencore
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 responsibly-sourced commodities that advance everyday life. The Group’s operations comprise around 150 mining and metallurgical sites and oil production assets. With a strong footprint in over 35 countries in both established and emerging regions for natural resources, Glencore’s industrial activities are supported by a global network of more than 30 marketing offices. Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Following the completion of the sale, Glencore’s companies employ around 135,000 people, including contractors. Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative. Our ambition is to be a net zero total emissions company by 2050.
About Vanadium One Iron Corp.
Vanadium One Iron Corp. is a mineral exploration and development company headquartered in Toronto, Canada. The Company is focused on advancing its 100% held Mont Sorcier, Vanadium-rich, Magnetite Iron Ore Project, in Chibougamau, Quebec. The Mont Sorcier Iron ore property hosts a large high quality magnetite iron resource with significant and extractable vanadium in a top tier mining jurisdiction. The project is located just 18 km outside of Chibougamau close to existing road, rail, low-cost hydro power and with access to deep water ports for export to global markets. Based upon recent and historical metallurgical test work Mont Sorcier is expected to produce a premium iron ore premium product (65-67% Fe) containing approximately 0.6% vanadium.