Northern Territory vanadium-titanium-iron project developer TNG Limited (ASX: TNG) has received a conditional letter of support from the Australian government’s Export Finance Australia (EFA) for up to $300 million in debt funding for its Mount Peake project.
Mount Peake is one of only 15 projects identified by the federal government for its critical minerals road map.
The non-binding letter of support outlines the need for TNG to make progress on several fronts in the lead up to EFA providing up to $300 million of debt funding.
The company must meet EFA’s “know you customer” process — including sanctions and anti-bribery requirements and checks.
Must get equity raised and financing from other lenders
Another requirement is the provision of detailed financing proposal and independent due diligence material, followed by TNG making “satisfactory progress” towards the project’s funding plan, including the raising first of equity and securing funding from other lenders.
TNG is also required to make progress securing offtake agreements, have a contracting strategy and contractors for the engineering, construction and commissioning of the project, and comply with the agency’s environmental and social risk policies.
As described by TNG, Mount Peake will be a long-life project, producing a suite of “high quality, high purity” strategic projects for global markets, including vanadium pentoxide, titanium dioxide pigment, and iron ore fines.
TNG expects Mount Peake to be among the top 10 global producers of vanadium and titanium products.
Mount Peake has received major project status from both the federal and Northern Territory governments.
‘Solid foundation’ for TNG begin raising project debt
TNG managing director and chief executive officer Paul Burton said he is delighted with the support from the Australian government through the EFA.
“This non-binding letter of support lays a solid foundation for the company to secure the debt financing package for the development of its Mount Peake project.
“Mount Peake is a significant critical minerals project for Australia as it will contribute to the diversification of global critical metals supply,“ he added.
Moreover, said Mr Burton, the project will bring more value from the critical metals downstream chain to Australia.
TNG’s strategy is to secure a multi-source funding package, combining government and commercial bank lending.