Australia-based mineral exploration company Hardey Resources (HDY) has signed an agreement to acquire Nelly Vanadium (NVPL), which owns the Nelly vanadium mine (NVM) in San Luis Province in Argentina.

According to the terms of the deal, HDY has an option to acquire 100% of the issued capital of NVPL.

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The mine contains several vanadium-rich polymetallic-sheeted vein systems, aligned North-East to South-West, that are around 1km-long and up to 5.5m wide.

“The board will undertake exploration activities with the aim of proving up a JORC-compliant resource and moving to re-open the Nelly Vanadium Mine.”

HDY intends to re-open the mine, for which an application is expected to be submitted to the San Luis mines department in an effort to accelerate the recommencement of production.

As per the terms of the deal, HDY has paid $75,000 to NVPL for the grant of the option to acquire NVPL.

In case HDY exercises the option, it will issue 7.375 million fully paid ordinary shares and the same number of listed options to acquire shares.

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Once the transaction is closed, the shares to be issued to the NVPL shareholders will account for around 35% of HDY’s expanded issued capital.

The acquisition also includes a 3% net smelter return (NSR) royalty to NPVL’s founding shareholders for production from the mine.

Hardey Resources executive chairman Terence Clee said: “Upon finalising the acquisition, the board’s focus will be undertaking exploration activities with the aim of proving up a JORC-compliant resource and moving to re-open the Nelly Vanadium Mine.

“Furthermore, the board is optimistic demand for vanadium will remain robust over the next few years, as structural changes augur favourably for the continued expansion of the renewable battery sector.”

The mine is a 53ha tenement, with historic production of vanadium pentoxide between 1949-57.

HDY is planning to undertake a drilling programme to generate geological and assay information with the aim of modelling a resource.