Non-Binding Offtake Term Sheet for Balasausqandiq

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (INCLUDING AS IT FORMS PART OF THE LAWS OF ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

17 December 2024

Ferro-Alloy Resources Limited

("Ferro-Alloy" or the "Group" or the "Company")

Non-Binding Offtake Term Sheet for Standard Vanadium Pentoxide from Phase 1 of the Balasausqandiq Project

Ferro-Alloy Resources Limited (LSE:FAR), the vanadium producer and developer of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, is pleased to announce that it has entered into a non-binding offtake term sheet with LL-Resources GmbH ("LLR") for the sale of standard vanadium pentoxide from Phase 1 of the Balasausqandiq Project.

·    The Company has entered into a non-binding offtake term sheet with LLR for sale of the entire production of standard vanadium pentoxide from Phase 1 of the Balasausqandiq Project

·    The initial term will be for a period of six years commencing from the start of production, with the option for subsequent terms

·    Headquartered in Graz, Austria, and founded in 2011 as a trading company, LLR has a significant presence in the global commodities sector serving more than 300 steel mills, foundries, traders and other end users. With a worldwide turnover of €550 million in 2023, LLR is a trading and producing company for a wide variety of ferro-alloys and metals, with production sites in Germany (aluminium), Sweden (ferro-titanium), Slovenia (cored wire), Latvia (ferro-vanadium / ferro-titanium), Oman (ferro-chrome) and Albania (chrome ore). Further information on LLR can be found at www.ll-resources.com

·    The Company is continuing the development of its expertise in the production of other various vanadium products and has already developed the technological processes to produce high purity vanadium pentoxide, mixed vanadium oxides and vanadium electrolyte (to be produced at the Phase 1 Balasausqandiq plant in line with market demand). All of these products will be marketed separately

Commenting on the term sheet, Nick Bridgen, CEO of Ferro-Alloy Resources said:

"In LLR, we have a trading partner located in the heart of Europe and with a global reach. As we come to the final stages of our feasibility study, this will enable us to begin to negotiate the project financing with confidence in our routes to market."

ENDS

For further information, visit www.ferro-alloy.com or contact:

Notes to Editors

About Ferro-Alloy Resources Limited:

The Company's operations are all located at the Balasausqandiq deposit in Kyzylordinskoye Oblast in the South of Kazakhstan.

Balasausqandiq is a very large deposit, with vanadium as the principal product together with the carbon black substitute ("CBS") and several by-products. Owing to the nature of the ore, the capital and operating costs are very much lower than for other vanadium projects.    

The most recent mineral resource estimate for ore-body one (of seven) provided an Indicated Mineral Resource of 32.9 million tonnes at a mean grade of 0.62% vanadium pentoxide ("V₂O₅") equating to 203,364 contained tonnes of V₂O₅. In the system of reserve estimation used in Kazakhstan the reserves are estimated to be over 70m tonnes in ore-bodies 1 to 5 but this does not include the full depth of ore-bodies 2 to 5 or the remaining ore-bodies which remain substantially unexplored. 

The grade of carbon in the deposit is over 8%.  The carbon flows through to the tailings from where it is concentrated in a simple low-cost operation into a 40% carbon product, the CBS, that can be used in place of carbon black as a reinforcing filler in the making of rubber.

The Project will be developed in two phases, Phase 1 and Phase 2, with Phase 1 treating 1.65 million tonnes per year.

There is an existing concentrate processing operation at the site of the Balasausqandiq deposit. The production facilities were originally created from a 15,000 tonnes per year pilot plant which was then expanded and adapted to recover vanadium, molybdenum and nickel from purchased concentrates.  Alongside this operation there is a well-equipped laboratory and highly skilled technical team who have already developed the technology that is being built into the feasibility study and is further developing and optimising processes needed for future vanadium and carbon operations. The plant will operate only when profitable concentrates are available and, when not operating as a production facility, will operate on an expanded basis as an R&D centre.