TNG clinches deal with Swiss chemical distributor for Mount Peake titanium dioxide pigment
TNG has secured a life-of-mine offtake deal for its anticipated titanium dioxide pigment from Mount Peake.
Strategic metals company TNG Ltd (ASX: TNG) has secured a deal with Swiss-based specialty chemicals distributor DKSH for the life-of-mine offtake of titanium dioxide pigment from its Mount Peake vanadium-titanium-iron project in the Northern Territory.
The company today announced it has inked a binding term sheet with the multi-billion-dollar group to purchase up to 100% of the pigment produced by its flagship project.
This deal means the Mount Peake project now has binding offtake deals in place for all three of its products. It follows the 2015 binding life-of-mine agreement made with Korean group WOOJIN Metals for a minimum 60% of vanadium output, and another life-of-mine deal inked in 2016 with Gunvor (Singapore) for iron products.
An optimal partner
Zurich-headquartered DKSH is regarded as a leading market expansion services provider with a long service history in the Asia-Pacific region.
Its core business is in supporting other companies to grow their business in new or existing markets and is organised into four units: consumer goods, healthcare, performance materials and technology.
TNG managing director Paul Burton said DKSH was a “great fit” to exclusively market the company’s titanium dioxide pigments.
“Under the agreement, DKSH will provide a full distribution service for our titanium dioxide products including technical support, global logistics, marketing and sales – utilising its extensive global network and strengths, particularly across the Asian region,” he said.
“Our core target market will initially be the production of a high-durability pigment for the outdoor coating industry, before branching out into other high-value niche markets.”
The terms of the deal allow DKSH to distribute the products globally, with the exception of the Iberian Peninsula and European Nordic countries.
Mr Burton said a binding offtake agreement is expected to be finalised within six months.
Mount Peake project progress
TNG completed its feasibility study and financial model for the Mount Peake project in November last year.
In February, the company announced its “breakthrough” process to produce the titanium dioxide pigment, which is based on the conventional sulphate pigment processing method.
It also recently reached agreement with native title landholders at Mount Peake, paving the way for the grant of the mining leases.
“Together with other key permitting milestones, including the expected grant of the Mount Peake mining licence in the fourth quarter of this year, this final offtake agreement will allow us to progress our commercialisation strategy for the Mount Peake project including the completion of the overall project funding package,” Mr Burton said.
Investors reacted positively to the news pushing TNG’s share price up almost 10% to $0.115 by late afternoon trade.