TNG Ltd’s (ASX: TNG) proposed vanadium production is now completely accounted for after the company revealed a binding life-of-mine offtake agreement with global commodity trader Gunvor Singapore.
Gunvor has agreed to purchase 40% of the proposed 6,000 tonnes per annum vanadium pentoxide production from TNG’s flagship Mount Peake project in the Northern Territory.
Combined with an existing agreement with Korea’s WOOJIN, which has agreed to purchase 60% of the operation’s vanadium, TNG now has offtake arrangements for all of its anticipated vanadium production.
Under the deal with Gunvor, vanadium pentoxide from Mount Peake will be purchased free on board and distributed globally.
TNG managing director and chief executive officer Paul Burton said the company “delighted” to secure the agreement with Gunvor, which is a major commodity trader with a global footprint.
Last year, Gunvor generated US$75 billion in revenue moving more than 198 million tonnes of commodities to buyers around the world.
Life-of-mine binding offtake for all three commodities
TNG’s offtake deal with Gunvor now means it has secured binding life-of-mine offtake agreements for all three products to be produced from Mount Peake – vanadium pentoxide, titanium dioxide pigment and iron oxide.
DKSH will purchase up to 150,000t annually of titanium dioxide pigment from Mount Peake and distribute it globally.
VIMSON Group has inked a binding life-of-mine agreement to purchase all of TNG’s proposed iron oxide production – estimated at 500,000tpa of 64% iron fines.
Similar to Gunvor and DKSH, the iron oxide will be bought free-on-board and distributed globally.
“This signing of this agreement [with Gunvor], together with existing offtake agreements with WOOJIN for vanadium pentoxide, DKSH for titanium dioxide pigment and VIMSON Group for iron oxide, is a major achievement and creates a robust commercial foundation to advance the Mount Peake project financing and development strategy,” Mr Burton said.
Advancing Mount Peake
Today’s offtake news follows TNG securing much-needed Aboriginal Areas Protection Authority approval for Mount Peake.
Additionally, earlier this month, TNG launched a $12.5 million entitlement issue to progress Mount Peake to a final investment decision.
To assist with securing funding for project development, TNG has appointed KfW IPEX-Bank as its lead debt advisor to arrange and structure a US$600 million debt finance to bring Mount Peake online.