Tando Resources (ASX: TNO) is about to launch its much-anticipated drilling campaign at its SPD vanadium project in South Africa after receiving the green light to lock-in its 73.95% stake in the project from the South African Reserve Bank late last month.
The bank’s approval was the final precondition required for Tando to secure the stake with shareholders giving the acquisition the nod earlier in August.
Two rigs have now been mobilised to the project site, with drilling to be carried out at the known SPD deposit which has a foreign SAMREC resource of 513 million tonnes at 0.78% vanadium.
At the same time, drilling will also kick-off at the high-grade vanadium pipes within the project where numerous samples returned in-situ grades in excess of 2% vanadium.
The phase one drilling program at the SPD deposit will include 18-holes for 1,650m and aims to convert the SAMREC resource to JORC code.
“We know we have extensive high-grade vanadium at SPD and that the value of the project will become clearer as we convert it to JORC status,” Tando managing director Bill Oliver said.
Meanwhile, Tando hopes drilling at the high-grade vanadium pipes that are within a 3km radius of the SPD deposit will firm up the potential for a low-cost fast-tracked direct shipping ore (DSO) operation.
Tando anticipates first visual results from the pipes late this month with assay results scheduled for October.
Once phase one drilling is finished, Tando will fire-up the second campaign which is designed to upgrade the JORC resource and will comprise 58 holes for 5,550m.
Both drilling campaigns are estimated to cost Tando $1.4 million and the company is fully-funded completion of both programs as well as metallurgical and mining studies.
“We also believe there is outstanding potential at the surrounding vanadium pipes, which we have demonstrated host high-grade mineralisation from surface and may, therefore, underpin a low-cost DSO operation,” Mr Oliver said.
“The commencement of drilling and the combination of the impending assay results, the testing of the pipes and the conversion to JORC resource status means we will have strong news flow over coming months,” Mr Oliver added.
Tando is targeting the strengthening vanadium market which is growing on the firming steel sector and emerging vanadium redox flow battery industry.
About 90% of vanadium produced is sourced for alloys in steel making, with the remainder diverted to the chemicals sector including the vanadium battery.
The price for vanadium pentoxide at 98% purity has surged from US$3.50 per pound in early 2017 to its current price of around US$18/lb.
Shares in Tando were steady at $0.17 by late morning trade.