Tsodilo Resources (TSD.V) has announced it has finished drilling on the Block 1 zone of the Xaudum iron ore project in Botswana, Africa. Approximately 31,000 meters were drilled on a spacing tight enough to be accepted to compile a maiden NI43-compliant resource estimate on Block 1 which is expected shortly. Of the 156 drill holes, 109 have hit iron mineralization, but this doesn’t mean the news is disappointing as a lot of the ‘empty’ holes were drilled to determine the outline of the iron ore deposit, so it’s perfectly normal to have some empty holes.
For this first resource estimate, are aiming for approximately 500 million tonnes at an average grade of 25-30% Fe. Keep in mind the Xaudum project is much bigger than just Block 1, which seems to be only the tip of the iceberg, as Tsodilo Resources has an exploration target of not less than 5-7 billion tonnes of mineralized ore.
We are looking forward to see the results of the maiden resource estimate and we are also eager to see whether or not the production of pig iron at Xaudum might be a viable possibility. We strongly believe the economics of a pig iron project would be superior to a project producing concentrate, as the initial capital expenditures should be lower and the operating margins higher. Obviously a lot more test work needs to be done, so it’s definitely too early to draw conclusions.
Additionally, the company has raised C$392,000 in a private placement by issuing units at C$1.28 per unit consisting of one common share and one full warrant, exercisable at C$1.40 during 2 years. An insider of the company (David Cushing) has subscribed for 70% of the total amount raised, which shows the insiders have a lot of skin in the game.
Disclosure: The author holds a long position in Tsodilo Resources. Tsodilo is a sponsor of the website. Please see our disclaimer for current positions.