Special report: Tando Resources shares soared today after the explorer got its hands on a high-grade vanadium project estimated to host a resource three times bigger than similar projects.

Vanadium is one of the hottest resources sectors at the moment. Its price has rocketed 550 per cent in the past three years driven by its role in making powerful batteries.

Investors piled into the stock (ASX:TNO), pushing its shares to an all-time high of 87.5c — more than four times their issue price of 20c in November.

The shares closed the day at 67c — up 43 per cent.

The small number of projects and players in the vanadium space and the projected substantial demand make it an extremely attractive opportunity.

Tando  has signed a term sheet to acquire 74 per cent of South African domiciled Vanadium Resources (Pty) Ltd, which is the owner of the SPD vanadium project.

Based on drilling data, an inferred resource of 513 million tonnes was delineated under the SAMREC Code (a “foreign resource” as defined in the ASX Listing Rules) for the project.

Drilling has also returned high vanadium grades of over 1 per cent with associated titanium mineralisation, while concentrate grades averaged 2 per cent vanadium pentoxide and 13 per cent titanium dioxide.

Vandium producing hub

“To have the opportunity to acquire a globally significant project with this grade profile in an existing vanadium producing hub is very exciting for the company,” managing director Bill Oliver said.

The SPD project is located in a similar geological setting to the mining operations of Rhovan (Glencore), Vametco (Bushveld Minerals) and Mapochs (International Resources Ltd) in the Gauteng region of South Africa. South Africa, along with China and Russia, produce approximately 85 per cent of the world’s vanadium.

Location of the SPD project and other vanadium deposits in the Bushveld Igneous Complex.
Location of the SPD project and other vanadium deposits in the Bushveld Igneous Complex.

Both the Rhovan and Vametco processing plants include refining to generate products used in the global steelmaking industry and aim to develop downstream processing to produce materials used in the battery market.

The SPD project is located only 30km from the currently dormant Mapochs mine, which has a processing plant and railway infrastructure.

Vanadium outpaces other battery metals

Vanadium’s price growth has outstripped popular battery metal rivals lithium and cobalt as well as the other traditional commodities in recent years.

About 90 per cent of global vanadium production is used to make high-strength steel, but future demand stems from its role in vanadium redox flow batteries (VRBs), which can store more power and discharge it over a much longer period than lithium-ion batteries.

“We obviously see vanadium redox flow batteries as a key part of the energy storage market going forward,” Mr Oliver said. “We think the SPD project is ideally placed to supply that market in the future.”

China is already building a couple of large batteries to store power.

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Rongke Power in Dalian province is building a 200MW/800MWh battery, which is going to need about 7000 tonnes of vanadium pentoxide.

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.

The advantage of VRB batteries over other batteries is that they last up to 20 years, substantially longer than most current batteries, and they can hold charge for as long as 12 months and discharge 100 per cent of their charge without damage.

Topping up the coffers

Tando has completed a $2 million capital raising at 40c per share to fund resource definition drilling and metallurgical testwork to rapidly advance the SPD project.

The acquisition of Vanadium Resources will be settled via the staged issue of 35 million shares at a deemed price of 30c when the project reaches certain milestones.

The first issue of 4.25 million shares is due on the completion of due diligence.

After a successful float at 20c per share last year, Tando’s shares have risen steadily in 2018 to reach 47c at Wednesday’s close.

Rapid exploration

Once due diligence is completed, Tando plans to undertake infill and confirmatory drilling to bring the resource into JORC-compliance.

JORC refers to mining industry standards for reporting exploration results and mineral resources, defined by the Australasian Joint Ore Reserves Committee.

The company will also undertake metallurgical testwork on core from drilling to assess hydrometallurgical processing options to pave the way for a scoping study to determine the project’s economic viability.


This special report is brought to you by Tando Resources.

This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice.

If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.