Tando discovers big upside at South African vanadium project

Tando Resources’ newly acquired “SPD” vanadium project in South Africa is showing early similarities to the formerly producing Kennedy’s Vale mine.

Tando (ASX:TNO) has reported high grades of over 2 per cent from magnetite pipes that are similar to the magnetite pipe once mined by Xstrata at the Kennedy’s Vale mine.

The Kennedy’s Vale mine lies along strike to the north from SPD, which is located in an established vanadium production hub in the Bushveld Complex.

Kennedy’s Vale, which was mothballed in 2004 after it ran out of ore, produced around 6000 tons per year of vanadium pentoxide and 2400 tons per year of ferro-vanadium.

The mine originally produced both pig iron and vanadium, but towards the end of its life
produced only vanadium, extracted from the magnetite by chemical leaching.

Magnetite "pipe" (circled in yellow) at the SPD Vanadium Project — Magnetite “pipe” (circled in yellow) at the SPD Vanadium Project

Plenty of upside

The advantage of magnetite pipes is that they are almost 100 per cent magnetite meaning there is no stripping of waste material required to get to the mineral-bearing ore.

Ore from the Kennedy’s Vale mine was extracted using direct leaching, simplifies the processing and means a higher purity vanadium product.

Similarities between Tando’s SPD project and the Kennedy’s Vale mine mean Tando could also possibly mine its project using direct leaching – which would make it attractive to makers of vanadium redox flow batteries.

These types of deposits can be virtually “dig and ship” operations.

Being relatively small areas, they will be reasonably quick to drill out and if Tando can find a number of these magnetite pipes and pull together a 5-10 million tonne resource, that would provide at least five years’ worth of feed.

Selectively mining the pipes means Tando could fast track production.

Most vanadium projects globally only produce around 1-2 million tonnes each year.

The only pure play producers of vanadium are Toronto’s Largo Resources, which processes 1.4 million tonnes each year from its Vanadio de Maracás Menchen mine in Brazil, and Tando’s neighbours Bushveld Minerals, which processes 2 million tonnes from the Vametco operations in South Africa. In fact South Africa is one of three major global vanadium producers.

Large resource potential

Samples from two magnetite pipes at the SPD project returned high-grade results of 2.08 per cent and 2.02 per cent vanadium pentoxide.

Notably, these are whole rock (or in situ) results, not concentrate grades, and are almost double the average in situ grade of the resource at the SPD project.

A review of historical reports and mapping indicate the presence of three more pipes in the eastern part of the project.

Tando has now started exploration aimed at identifying and sampling further outcropping magnetite pipes.

Tando’s high-grade vanadium project is already estimated to host a resource three times bigger than similar projects at over 500 million tonnes. Now it has discovered these magnetite pipes outside of that resource, indicating significant potential upside.

Vanadium in demand

At the moment, about 90 per cent of global vanadium production is used to make high-strength steel. But future demand stems from its role in vanadium batteries, which can store more power and last much longer than lithium batteries.

While lithium batteries have enjoyed a first-mover, economies-of-scale advantage, vanadium redox flow batteries (VFRBs) are carving out their own market in off-grid, deep-power cycle applications worldwide.

Projections estimate new demand of 300,000 tonnes of vanadium coming online over the next few years because of VRFBs – more than three times what is currently produced.

This special report is brought to you by Tando Resources.

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