TNG Ltd has made the final leap towards securing buyers for 100% of its forecasted production from its flagship Mount Peake vanadium-titanium-iron project in the Northern Territory.
The ASX-listed company said this week it had signed the final off-take term sheet for the iron that will be produced at Mt Peake with Indian mining conglomerate, Vimson Group committing to 100% of the iron production offtake.
This last hurdle comes after the company announced yesterday that it had also secured offtake agreements for 100% of its vanadium pentoxide products in addition to the existing offtake agreements already in place for 100% of its titanium dioxide pigment.
Vimson will provide full distribution services, including freight financing, technical support, logistics, marketing and sales for the iron product out of Mt Peake.
TNG’s Managing Director and CEO, Mr Paul Burton, said: “Coming hard on the heels of our recent agreement with Gunvor (Singapore), the signing of this Binding Term Sheet means that the forecast Mount Peake production is now fully under contract, strongly supporting a move into the financing and execution phase.”
“Achieving this outcome in the current challenging global market environment is a solid achievement by our team and is testament to the project’s quality, scale and robustness.”
Gunvor is a major global commodity trader and will offtake 40% of the vanadium pentoxide products from Mount Peake with the remaining 60% spoken for by South Korea’s Woojin Metals.
Swiss global specialty chemical distributor DKSH will offtake all of the titanium dioxide products.
Located 235 kilometres north of Alice Springs, the world-class Mount Peake deposit has an ore reserve of 41.1 million tonnes grading 0.42% vanadium pentoxide, 7.99% titanium dioxide and 28% iron.
TNG is planning to churn out about 100,000 tonnes per annum of titanium dioxide pigment, 6,000 tonnes per annum of vanadium pentoxide and 500,000 tonnes per annum of iron oxide over an “initial” 37-year mine life.
Ore from the project will be processed in Darwin using the company’s proprietary “TIVAN” process, a method for treating ore without the need for expensive, energy-intensive roasting.
To-date it has been used successfully to produce a 99% purity vanadium pentoxide, a high-grade titanium dioxide feedstock grading about 80% titanium dioxide and a 99.9% pure iron oxide product.
The optimised mine plan is estimated to deliver a life-of-mine net cash flow of $12.2 billion, a massive pre-tax net present value of $2.8 billion and a pre-tax IRR of 33%.
Germany’s KfW IPEX-Bank is leading a USD$600m debt raising to underpin the project’s development whilst metallurgical engineering company SMS Group is undertaking the front-end engineering and design work.
The combination of KfW IPEX bank providing funding and SMS Group doing the engineering is popping up regularly on the ASX now, with companies such as Altech Chemicals also tying up the dynamic duo for its HPA plant in Malasia.
TNG also appointed Australian contractor, McMahon Services in May to progress the program of work for the non-process infrastructure requirements for Mount Peake.
With a swag of offtakes in the bag now, a financier with clout and an engineering firm that has been there and done it before, this one looks like it might just get up – and soon.
Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au
By Matt Birney
