Resources Top 5: Vanadium Resources soars on magnetite DSO offtake deal

VR8 lead the way on Tuesday after signing an offtake deal for vanadium-rich magnetite DSO from the Steelpoortdrift project in South Africa.

An offtake deal for vanadium-rich magnetite DSO has seen Vanadium Resources fly high. Pic: Getty Images

• An offtake agreement will see VR8 supply 100,000 tonnes of vanadium-rich magnetite DSO each month 

• LMG is targeting the start of operations at its Demonstration Plant at the beginning of August 2025

• A scoping study is nearing completion assessing mining and processing at Leliyn graphite project

Your standout small cap resources stocks for Tuesday, July 22, 2025.

Vanadium Resources (ASX:VR8)

Signing an offtake agreement for the supply of 100,000 tonnes of vanadium-rich magnetite direct shipping ore (DSO) each month from the world-class Steelpoortdrift vanadium project in South Africa has seen Vanadium Resources (ASX:VR8) soar 122% to a daily high of 5.1c.

It eased to close at 4.1c, with more than 55 million shares changing hands. Even with the late pullback, VR8 remains at 2025 highs.

The binding agreement, which follows a recent MoU, was executed by VR8 subsidiary VanRes with China Precious Asia Limited (CPAL) and is subject to VanRes appointing a suitable mining contractor and ensuring the DSO product meets agreed specifications.

Due to the absence of a standard spot price for the DSO product, the agreement, which is valid for two years, is also conditional on VanRes finalising pricing terms with CPAL by August 30, 2025.

The offtake positions VR8 to transition from developer to producer and is a fillip as the company advances its near-term cash flow strategy aimed at unlocking value from Steelpoortdrift’s vast JORC resource, while preserving the flexibility to pursue full-scale development as market conditions improve.

“We are pleased to formalise our partnership with CPAL through a commercially binding agreement,” VR8 executive chairman Jurie Wessels said.

“With a practical and realistic framework now in place for initiating mining activities and product supply, our attention will shift to closing this transaction. 

“This includes finalising a pricing mechanism for our product — given the absence of a standard spot price — and appointing a mining contractor. 

“The selected contractor will be responsible for establishing operations at Steelpoortdrift to extract, crush, screen and stockpile ore in accordance with agreed specifications.

“Alongside the anticipated delivery of DSO to CPAL, negotiations with other potential offtakers are also progressing."

Those could lead to the full scale development of Steelpoortdrift, with the company investigating opportunities to move into beneficiation and downstream processing.

Latrobe Magnesium (ASX:LMG)

It has been a long, drawn out process with plenty of hurdles but there is light at the end of the tunnel for Latrobe Magnesium (ASX:LMG), which is targeting the start of operations at its Demonstration Plant in Victoria’s Latrobe Valley in the beginning of August 2025.

Investors welcome progress by the company, which aims to extract valuable magnesium from waste fly ash, and shares closed 45% higher at 1.6c.

In an update in late June, LMG said that to begin ore commissioning and transition into operations, it was progressing the following:

• Obtaining approval to operate from the Environmental Protection Authority (EPA)
• Securing operating labour at suitable commercial rates
• Finalising the ash stockpile
• Reinstatement of the management team and mobilising vendor technical personnel; and
• Assessment of inventory and restock reagents as required.

LMG submitted all required documentation to the EPA for approval to operate. On June 19, 2025, the EPA advised that although the submission was made in adequate time, the regulator was very busy at this time of year. 

Nonetheless, LMG was informed that its application was being prioritised and a draft amended pilot project licence would be issued for review by mid-July.

The process plant is being progressively brought out of care and maintenance, with pre-start checks completed across most process areas.

Ongoing pre-commissioning has included equipment and safety verifications, lubrication changes and dry test runs. All reagent inventories have been reviewed and quantities are sufficient to support plant start-up.

LMG also executed an updated ash supply agreement with Energy Australia, enabling the development of the ash stockpile, which will be reclaimed, transported and supplied to the Demonstration Plant as feedstock. 

Mining contractor, RTL Mining and Earthworks, is preparing the stockpile which is expected to align with the start of operations.

Operational procedures are undergoing final review by safety and management teams and these processes will underpin the onboarding and training program for operational staff in the lead-up to plant start-up.

Kingsland Minerals (ASX:KNG)

Strong progress is being made on a scoping study assessing the potential for on-site mining and processing at Leliyn graphite project about 250km south of Darwin in the NT with Kingsland Minerals (ASX:KNG) shares 13.79% higher to 16.5c.

Work is well advanced with the study set to be completed by the end of the current quarter.

Alongside this study, testwork to produce purified, spherical graphite is being carried out and will also wrap up this quarter.

These milestones will progress Leliyn to the next phase of development and enable KNG to begin a pre-feasibility study.

The scoping study, based on a 194.6Mt resource grading 7.3% total graphitic carbon (TGC), contemplates a mine and processing facility producing a 94% spherical graphite concentrate, primarily used in the anodes of lithium-ion batteries.

KNG also plans more drilling with a particular focus on expanding the indicated resource to provide flexibility in considering upscaling the size of the mine and/or processing plant.

Cannindah Resources (ASX:CAE)

Potential extensions to copper mineralisation at Mt Cannindah project in central Queensland pushed Cannindah Resources (ASX:CAE) to a daily top of 2.8c, 22% higher than the July 21 close, before closing at 2.5c.

A review of historical data and the company’s surface mapping and sampling point to potential extensions to the Cannindah Breccia resource.

The Southern Breccia Extension target has been interpreted over a strike length of more than 300 metres and the Northern Breccia Extension target to over 200 metres.

The review also identified features within and outside the resource that control the locations of higher-grade copper.

These potential extensions raise the likelihood that further exploration will unlock more copper.

This comes as US copper futures jumped to US$5.64/lb thanks to positive long-term demand expectations and the Trump administration declaring a planned 50% tariff on copper imports.

Managing director Tom Pickett said the company’s upcoming drill program would test the new extensions as well as previously disclosed tier-1 porphyry copper-gold targets in the Southern and Eastern areas.

Koonenberry Gold (ASX:KNB)

The Enmore project of Koonenberry Gold (ASX:KNB) in northern NSW continues to grow in stature with rock chip sampling identifying a parallel shear zone to the Sunnyside gold system and shares hit 5.8c, a rise of 11.54, before closing at 5.3c

Sampling of a >950m long and ~300m wide gold-in-soil anomaly returned assays of up to 14.05g/t and visible gold was also observed in the new zone, which is in a similar structural and lithological setting to Sunnyside.

“We are applying the knowledge gained from our successful drilling campaign at Sunnyside and developing a pipeline of targets for drill testing,” managing director Dan Power said.

“This newly defined target sits on a parallel structure to Sunnyside and highlights the untapped district potential of our Enmore Project giving us the ability to advance multiple targets in our next drilling campaign in conjunction with extensional drilling at Sunnyside.”

This article does not constitute financial product advice. You should consider obtaining independent financial advice before making any financial decisions. While Kingsland Minerals, Cannindah Resources and Koonenberry Gold are Stockhead advertisers, they did not sponsor this article.

Originally published as Resources Top 5: Vanadium Resources soars on magnetite DSO offtake deal