The AIM company is in the process of carrying out due diligence and has 45 days to come back to the seller with an answer.
Regency is paying an option fee of £25,000, which will be settled through the issues of 5mln new shares at 0.5p apiece – a 43% premium to the market price when the deal was agreed.
Vanadium is now often used in electric car batteries, growing demand for which has helped to push the price of the metal up by 700% over the past three years or so.
More detailed information will be provided in due course should the explorer decide to push ahead and exercise the option.
Alongside the announcement, Regency announced that it is to surrender the niobium-tantalum License 2014/01 at Motzfeldt, Greenland at the end of 2018.
“As we exit Greenland having concluded that the niobium-tantalum project there was non-core, we are pleased to have secured this option for Regency Mines which if exercised gives the company exposure to a Vanadium exploration opportunity in North America that lies squarely within our battery metals focus and complements our nickel-cobalt asset at Mambare,” said chief executive Andrew Bell.
“A successful project in vanadium could provide Regency with three main pillars of value within the company.
“The vanadium project would provide a high potential impact exploration opportunity. At our 50% owned Mambare project we have a significant JORC compliant nickel/cobalt deposit. And we have a revenue-generating coal production asset through our 47% interest in Mining Equity Trust LLC.”
Shares were unchanged at 0.35p late on Thursday afternoon.