Tando Resources Ltd (ASX:TNO) is about to commence a drilling program due to a mining right being granted over the SPD Vanadium Project in South Africa.
Drilling contractors have been engaged and preparations for two phases of drilling to define a JORC-compliant indicated mineral resource are almost complete.
Shares increased 16% to 18.5 cents intra-day.
READ: Tando Resources shores up SPD project with more high-grade vanadium
Tando managing director Bill Oliver said the issue of the mining right by the South African Department of Mineral Resources was a significant step for the SPD Vanadium Project.
He said: “We believe SPD is a world-class vanadium asset.
“Our view is supported by the historical drilling results and more recently, the outstanding high-grade results we have achieved from sampling the vanadium pipes on-site.
“We are confident that the imminent drilling program will justify our strong belief in the SPD project, which we already know hosts an extensive deposit with high-grade vanadium.
High-grade pipes underpin DSO potential
Phase I of the drilling program will comprise 18 holes for 1,650 metres at the SPD deposit, which has a resource of 513 million tonnes at 0.78% vanadium defined under the South African Mineral Resource Committee (SAMREC) code.
It will aim at converting the foreign resource into a mineral resource estimate as defined in the JORC code.
The first phase will revisit holes drilled at the shallow, high-grade vanadium pipes which are within 3 kilometres of the SPD deposit.
Samples taken from the surface of these pipes have consistently assayed above 2% vanadium.
Oliver said: “There is also substantial upside in the vanadium pipes, where the sampling results show there is potential to generate significant early cashflow via a low-cost direct shipping ore (DSO) vanadium operation.”
The second phase of drilling will comprise 58 holes for 5,550 metres and will aim to upgrade the maiden resource to an indicated category.
Location of the SPD Vanadium Project and other vanadium deposits in the Bushveld Igneous Complex
Demand for vanadium expected to increase
Tando has targeted vanadium as a commodity of interest due to its use in energy storage, particularly vanadium redox flow batteries.
The company anticipates that increases in demand for large-scale energy storage will lead to significant increases in the demand for vanadium.
Prices for vanadium pentoxide, a more commonly traded intermediate product, have surged by 200% over the past year.
Oliver commented: “With the energy sector undergoing a structural shift in favour of renewable energies and demand for vanadium forecast to grow strongly as a result, our work at SPD is timed perfectly.”
The cost of both phases of drilling and resultant resource estimations is estimated at $1.4 million.
Tando has cash reserves in excess of $4 million and is fully funded for the drilling as well as the metallurgical and mining studies that will follow.