Vanadium explorer Tando Resources (ASX: TNO) has confirmed the final pre-condition to its 73.95% stake in the high-grade SPD vanadium project in South Africa has been satisfied and that the acquisition is now unconditional.
The company announced today it had received the green light to lock-in its stake from South African Reserve Bank.
It follows approval from Tando shareholders received at a general meeting last week.
In March, Tando entered into a binding heads of agreement to acquire 73.95% interest in South African company Vanadium Resources which holds the rights to the SPD project.
Completion of the acquisition is expected to occur imminently.
Maiden drilling to start this month
Progress at the SPD project continues to move at a steady pace for Tando.
In July, South Africa’s Department of Mineral Resources granted Tando a mining right for SPD, paving the way for the start of a $1.4 million maiden drilling program this month to convert the existing deposit to a JORC resource and establish the viability of a direct shipping ore operation.
Phase one drilling will comprise 18 holes for 1,650 metres at SPD, where there is currently a “foreign resource” of 513 million tonnes at a grade of 0.78% vanadium pentoxide defined under the SAMREC (South African Mineral Resource Committee) code.
Tando hopes to convert this to a mineral resource estimate as defined in the JORC code within two months from first drill.
Activities will also include drilling the shallow, high-grade vanadium pipes located within a 3km radius of SPD and which Tando has previously reported as hosting high-grade vanadium assays “consistently above 2% vanadium pentoxide” from samples taken at surface.
“These grades highlight the strong potential for the pipes to underpin a simple, low-cost, high-grade DSO operation with a compressed development timetable,” the company said.
Phase two will commence immediately after the completion of phase one, and will be aimed at upgrading the maiden JORC resource to an indicated category.
Tando said both drilling phases will be fully funded from cash reserves of more than $4 million.
World vanadium supply
Approximately 85% of the world’s vanadium supply is currently produced in China, Russia and South Africa.
Tando said the high-grade SPD project, located in South Africa’s vanadium production hub, has potential to contribute significantly to this supply, based on its tonnage and grade in concentrate.
The company has targeted vanadium as a commodity of interest due to its usage in energy storage, specifically, vanadium redox flow batteries.
It is anticipated that forecast increase in battery usage for large scale energy storage will lead to a significant increase in the demand for vanadium.