Tando set to complete Vanadium JORC resource estimate

Published 12-JUN-2018 15:29 P.M.


3 minute read

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Highflying Tando Resources (ASX:TNO) could deliver further share price upside as management gears up to start its maiden drilling campaign at the SPD Vanadium Project in South Africa.

Vanadium producers and emerging players in the sector have generally experienced robust share price momentum over the last 12 months.

The price of vanadium pentoxide with a grade of more than 98% has increased from US$3.50 per pound at the start of 2017 to current prices of around US$15 per pound.

A combination of exploration success and commodity price momentum has resulted in Tando’s share price increasing substantially over the last 12 months.

The company is trading close to its 12 month high of 26 cents, representing a five-fold gain in the space of 6 months.

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Conversion to JORC mineral resource

SPD is a large, high grade vanadium deposit located in the established vanadium production hub of South Africa.

The upcoming 18-hole/1650 metre phase 1 drill program aims to verify historical drilling so that the existing resource classed as inferred under the SAMREC code (see below) can be converted to a JORC mineral resource.

An updated resource should be available eight weeks after the commencement of drilling, providing the timing of drill production and analysis of results matches forecast timeframes.

The timing is speculative at this stage and investors should seek professional financial advice if considering this stock for their portfolio.

Depth of high grade magnetite pipes to be tested

Five holes for 500 metres will also be drilled to provide an initial sub-surface test of the depth extent of the high grade magnetite pipes which have been identified east of the resource area as indicated below.

Samples from two magnetite pipes returned results of 2.08% and 2.02% vanadium.

These are whole rock or in-situ results, not concentrate grades, and compare favourably to the already high in-situ resource grade of the SPD project which is in the vicinity of 0.8 per cent.

Phase 2 drilling to provide confidence and increase indicated resource

Following completion of phase 1, Tando will progress to phase 2 which aims to infill the drill hole spacing within the resource area.

Management expects that new data should be adequate to delineate mineral resources in the Indicated category, based on the dataset available to date and assuming results are consistent with expectations.

These will be used in a scoping study which will assist management in accurately assessing the economics of the SPD project.

The scoping study is expected to be completed by the December quarter of 2018.

Both drilling programs covered by existing cash reserves

Wide diameter drilling will be carried out to provide samples for metallurgical test work, which will be used in the upcoming scoping study.

Test work will assess the likely capital and operating costs of both the established salt roasting process, as well as the direct leaching approach.

Management expects the two drilling programs to be completed at a cost of about $1.4 million, and this will be funded from the company’s current cash reserves which are in excess of $4 million.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

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