Surefire Resources secures strategic agreement with DRA Global to advance Victory Bore vanadium project

Surefire Resources (ASX: SRN) has executed a key Heads of Agreement (HOA) with international engineering specialist DRA Global (ASX: DRA) to help advance its world-class Victory Bore iron-vanadium project in Western Australia to commercialisation.

Under the agreement, DRA Global will assist Surefire in progressing Victory Bore from feasibility through to construction and operation, supporting both upstream and downstream processing plans.

Surefire previously obtained robust pre-feasibility study results for the project, indicating a net present value of $1.6 billion at 10%, a 42% internal rate of return and a payback period of 2.4 years over a 24-year mine life.

Development strategy

DRA has agreed to provide Surefire with study, engineering procurement construction management, non-process infrastructure, project delivery, operational readiness and operations and maintenance services, subject to future agreements between the parties.

“This is a significant long-term agreement for the company, providing strong support from a global tier 1 group for its development strategy and focus on delivering the Victory Bore project,” managing director Paul Burton said.

“DRA Global provides a complete delivery package, with the added advantage of experience in working on mineral processing projects in Saudi Arabia and in vanadium processing.”

“We look forward to working closely with DRA Global and the advantages that this brings to the company and shareholders.”

Saudi Arabian presence

Of note is DRA’s significant major project experience and expertise in mineral processing and mining operations in both the Kingdom of Saudi Arabia (KSA) and Australia, which will be beneficial to Surefire’s development plans.

The company has already engaged in positive discussions with the KSA regarding a development strategy to operate a mine and beneficiation facility at the Victory Bore site to produce a high-grade vanadium concentrate, which would then be shipped to the KSA.

Downstream processing of the magnetite concentrate would occur in nearby established industrial centres in the KSA to produce high-value and diversified end products, including vanadium pentoxide, vanadium electrolyte, ferrovanadium, pig iron, ferrotitanium and high-purity iron oxide.

Funding and offtake progress

Surefire’s strategy for Victory Bore is to establish a low-capital-cost operation in Australia, with value-added downstream processing and the production of high-value products in a low-energy-cost jurisdiction.

Mr Burton says the company is making progress in its international process for establishing interest, funding and offtake agreements for the delivery of the project.

These ongoing discussions are with interested parties including groups in the KSA, the Middle East region and Europe.

Vanadium demand

Market Research Future forecasts that the vanadium industry will grow from $4.5 billion in 2024 to approximately $7b by 2032, exhibiting a compound annual growth rate of 5% over that period.

Major drivers for this include the increasing demand for vanadium in the automobile industry, growing governmental efforts to find green energy alternatives and increasing recognition of vanadium’s potential as a replacement in the production of other high-performance items.

The unique mineral is classified by the Australian government as a “critical mineral” and, according to the Critical Minerals Group, market participants are becoming increasingly bullish in their outlook on Australian vanadium demand and prices, anticipating growth from both traditional and emerging end-use bases.