ASX-listed vanadium player, TNG Ltd, appears to have locked down a solid looking, Indian, private cornerstone investor that will assist it to catapult the company’s Northern Territory based vanadium project into production.
In a market update on Monday, TNG said it had executed a binding subscription agreement with Goa-based Vimson Group, through its Singapore-based subsidiary VM Salgaocar & Bro, for a $10m strategic investment into TNG.
Vimson is a private, family-owned Indian mining conglomerate with extensive interests across several sectors including resources. TNG will use the money to advance its Mount Peake vanadium-titanium-iron project in the Northern Territory.
Mount Peake, according to the ASX junior, has an ore reserve of 41.1 million tonnes grading 0.42 per cent vanadium pentoxide, 7.99 per cent titanium dioxide and 28 per cent iron.
It is forecast to produce 243,000 tonnes of high-purity V2O5, 3.5 million tonnes of titanium pigment and 10.6 million tonnes of high-grade iron oxide during its initial 17-year mine life according to economic studies undertaken for TNG.
Earlier this year, TNG received federal environmental approval for the project that is located 230km northwest of Alice Springs and a number of indigenous related approvals have also now been locked in.
Commenting on the strategic investment, TNG Managing Director Paul Burton said: “We’re very pleased to have secured a strategic investment from the Vimson Group, a leader in the Indian resources sector with similar values and growth strategies to TNG, and we welcome them to our register.”
“With a project of the scale and complexity of Mount Peake, it has always been part of the financing strategy to create an opportunity for a strategic investment of this nature that may lead to an offtake and could assist with securing part of the project equity finance in the future.”
VM Salgaocar & Bro director Vivek Salgaocar added: “We have been impressed with the senior management and leadership of TNG and are excited at the prospect of the Mount Peake Vanadium-Titanium-Iron Project, and TNG’s proprietary TIVAN Technology.”
“The opportunity fits in with our plans for strategic global investments in mineral resources, and we look forward to a mutually beneficial, long-term relationship.”
TNG said under the subscription agreement, the Vimson Group would acquire TNG fully paid ordinary shares at a subscription price of $0.104, representing a 20 per cent discount to the 15-trading day volume weighted average price of the shares prior to 18 September 2018.
The company also said it was offering eligible shareholders the opportunity to participate in a share purchase plan to acquire up to approximately $15,000 worth of shares at an issue price of $0.109 per share, without paying brokerage or other transaction costs.
TNG sees significant potential for vanadium, not just for its use as a high strength steel additive, but also as demand surges for redox flow batteries used in large-scale battery storage applications.
There has been a 400 per cent jump in vanadium pentoxide prices over the last two years to USD$17 a pound as at the end of the June 2018 quarter as vanadium fights a rear-guard action against early mover lithium, as a potential game changer in the power generation industry.
