Tando Resources (ASX: TNO) has firmed up the vanadium prospects at its flagship SPD project in South Africa, with every hole drilled to-date revealing visible magnetite which is known to host vanadium at the project.
Phase one drilling at SPD has been completed with all 16 holes unearthing the visible magnetite in the diamond core and reverse circulation chips.
According to Tando, magnetite is “well-established” as the host rock for vanadium at SPD. All holes were drilled close to historic holes, which previously returned high-grade vanadium in both whole rock assays and in the resultant magnetic concentrate.
Last week, Tando reported initial assay results from the drilling campaign of 7m at 0.84% vanadium from 3m, and 35m at 0.66% vanadium from 47m, including two higher grade intervals of 9m at 1.12% vanadium and 2m at 1.61% vanadium.
“The visuals from these holes are highly encouraging, particularly given their strong correlation with historic drilling results,” Tando managing director Bill Oliver said.
“An example of this is the high-grade results from VRC001.”
Phase one drilling tested the SPD deposit where a previous foreign SAMREC resource had been calculated of 513 million tonnes grading 0.78% vanadium pentoxide.
Once all assays have been received from the phase one campaign, Tando will calculate a JORC resource for the project, with the resource expected to be published before the end of the year.
The phase one campaign also included two diamond core holes to provide samples for metallurgical testwork.
A phase two drilling program will focus on upgrading the pending JORC resource to indicated status and will comprise 58 holes for 5,550m.
Meanwhile, a diamond drill rig has been transported to the surrounding high-grade vanadium pipes at SPD to test the pipes and firm up the potential of a near-term, low-cost, direct shipping ore operation.
Tando said it was fully funded for the upcoming drilling as well as metallurgical and mining studies.
Tando is fast-tracking SPD during a time the vanadium price is close to its all time high. With the 98% vanadium pentoxide price hovering at around US$25 per pound, many analysts believe it will continue to climb before tapering off.
Driving the price growth is mounting demand from steel and vanadium redox flow battery sectors.
The steel sector swallows up about 90% of vanadium production and the consumption is forecast to continue increasing on the back of stricter construction standards that require stronger steel such as rebar (which includes vanadium).
Additionally, tighter environmental legislation in China has reduced the amount of vanadium supplied to the market.