Tsodilo Resources: Exposure To Botswana's Undiscovered Mineral Riches - Tsodilo Resources Limited (OTCMKTS:TSDRF) | Seeking Alpha

Tsodilo Resources Limited (TSDRF), Includes: FQVLF

Summary

• JV Partnership with First Quantum Minerals for Copper Exploration.
• Xaudum Iron Project with Potential for 5-7 Billion Tonnes.
• Botswana-based Prospect Generator with Company-Owned Drill Rigs.

(Editor's Note: Investor's should be mindful of the risks of transacting in illiquid securities such as TSDRF. Tsodilo's Canadian listing, TSD.V, offers an additional alternative, but is also highly illiquid.)

Featured Investment: Tsodilo Resources Ltd (CVE:TSD

Tsodilo Resources (OTC:TSDRF) an exploration/development company with operations in Botswana. The company has uniquely positioned itself as (1) a Botswana-based prospect generator, (2) an iron ore development play, and (3) a promising "carried interest" copper play. With a current market capitalization of ~ $40M, the company offers excellent speculative upside. Additionally, TSD's multi-pronged approach and strong shareholder base provides a decent Margin of Safety at this valuation.

The Partnership has held TSD since inception with an average cost of $0.85 per share. As of July 15, Tsodilo is trading at $1.30. TSD is the second strongest performer of the 7 holdings (out of 25 current holdings) that the Partnership has stuck with since inception in September 2011. Additionally, due to this outperformance, TSD is one of the Partnership's top 3 largest holdings.

In this Featured Investment piece, I start by providing the investment theses for copper and iron ore (the two metals of most interest to Tsodilo shareholders). It is important to keep in mind that Tsodilo has not yet found a copper deposit and is only just starting to define its Xaudum Iron Ore Formation. If the company doesn't ultimately find economic copper or iron ore, then the prospects for these two commodities are irrelevant. Conversely, if the company does end up gaining exposure to a world-class copper or iron ore deposit, then shareholders will be rewarded regardless of the copper/iron ore price (baring a monumental collapse). Regardless, I thought it would be good to share my investment theses on both of these metals for some broader perspective on the Tsodilo Resources story.

I then profile the African country of Botswana - the sole jurisdiction in which TSD operates (though the company does have their corporate office in Toronto). The stability of Botswana both geopolitically and as a viable mining destination is essential to the success of this investment.

I conclude with my investment thesis for Tsodilo, covering the company's background, management team, current operations, and ultimate upside as an investment. I then comment on Tsodilo's Margin of Safety as, with any investment, understanding the downside is just as important as knowing what there is to gain.