Tando Resources Limited (ASX: TNO) is a metals and mining company engaged in the exploration and development of zinc, lead, copper, and other mineral projects primarily in the State of Western Australia. On March 27th, 2019, the company announced consistently excellent drilling results from its SPD Vanadium Project in South Africa, which is reportedly one of the highest-grade Mineral Resources in the world.
The recorded intersections are from the infill drilling and extension of the high-grade zone of 87Mt at 1.07% V2O5 which lies within the global Mineral Resource at SPD, which is 588 million tonnes at a whole rock grade of 0.78% V2O5.
The latest receipt of the assay results will support the ongoing Scoping Study for the high-grade zone which will further underpin the viability of the project. Besides, the update is a crucial step in progressing the Phase 1 production project which involves low capital costs due to the shallow nature of the high-grade mineralized zones and the simple beneficiation process, with short lead time to production and thus, an early cash flow generation for the Company.
Prior to this, on March 18th, 2018, the company had also announced outstanding results from the large scale, plant simulation metallurgical test work at its SPD project, which produced a concentrate grading 2.2% V2O5. These results were also consistent with the previous, laboratory-scale, Davis Tube results, which is an excellent indication to scale up the bench top testwork to large scale trials.
At the backdrop of the growing global bent towards renewable energy solutions, a vast increase in energy storage installations will be required. Thus, the usage of vanadium redox flow batteries (VRFB) is anticipated to rise in the future with a corresponding longer-term demand for vanadium. Besides, the use in the steel industry accounts for over 90% of current vanadium demand.
Also, the SPD Vanadium Project enjoys a very strategic location, i.e., South Africa which is also one of the leading vanadium producing nations along with China and Russia, all of them together accounting for 85% of the global production.
As per the financial report released for the half-year ended December 31st, 2018, Tando Resources recorded a net loss after tax of around $ 3.19 million, up on $ 570.7k net loss in the prior corresponding year ended December 31st, 2017. During the concerned period, the company commenced an intensive drilling programme at the SPD Vanadium project.
The net assets were valued at approximately $ 12.42 million including net cash and cash equivalents of $ 1.92 million as of December 31st, 2018. The operating activities resulted in net cash outflows of around $ 690.04k, mainly due to high payments to suppliers and employees ($ 730.9k). There were extensive investing activities undertaken during the period that generated high net cash outflows of $ 1.79 million. These included payments for capitalized exploration and evaluation ($ 1.67 million), costs related to the acquisition of 24.26% of the SPD Vanadium Project ($ 116.1k) and other payments for plant and equipment. Meanwhile, financing activities generated net cash inflows of $ 72.3k.
Tando Resources got listed on the ASX in 2017 and has a market valuation of around $ 19.38 million with ~ 193.84 million outstanding shares. On March 28th, 2019, the TNO stock is trading flat at AUD 0.100 (As at 1:10 PM AEST).
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