TNG lines up KPMG to oversee Mount Peake project financing

TNG Limited ASX KPMG Corporate Finance Mount Peake project
Stage 1 development of the vanadium-titanium-iron project has been estimated to cost $824 million.

The Mount Peake vanadium-titanium-iron project in the Northern Territory is another step closer to development as TNG Ltd (ASX: TNG) appoints KPMG Corporate Finance to assist with total project finance.

Stage 1 development was estimated last year to cost $824 million.

The company’s plan is to build a mine and concentrate plant at the site, 235km north of Alice Springs, then truck the concentrate 85km by road to connect with the Alice Springs-Darwin railway. The concentrate will then be railed to the Northern Territory capital for processing.

KPMG has recent experience working with Germany’s state-owned development bank, KfW, and is familiar with the financing processes and requirements.

In December 2018, TNG mandated KfW’s Ipex-Bank — now TNG’s exclusive senior debt advisor — to structure a total debt package for up to US$600 million (A$817 million).

Planning for long-life strategic materials production

KPMG has also worked with the Northern Australian Infrastructure Facility (NAIF) and export credit agencies.

TNG managing director and chief executive officer Paul Burton said the arrangement with KPMG to provide advice on a financial package for Mount Peake is a significant advance.

Mount Peake is intended to be a long-life project producing a range of high-quality, high-purity strategic materials including vanadium pentoxide, titanium dioxide pigment, and iron ore fines.

“The KPMG team’s expertise in global mining projects, very strong track record of major transaction achievements in Australia and globally, and existing relationships with anticipated lenders KfW and NAIF, adds credibility,” he said.

“The appointment adds to [the] list of Tier-1 partners involved in the Mount Peake project, providing the best chance for project delivery,” Mr Burton added.

KPMG has a dedicated mining corporate finance team.

TNG commodities in demand

About 90% of titanium dioxide is used in the pigment industry, including as a component of paints, coatings, paper and inks.

Current global demand is about 6.7 million tonnes a year, and the planned output from Mount Peake will equate to about 1.5% of world supply.

However, global production is dependent on the strength of world economic conditions.

The main use of vanadium is as an additive in high-strength steel, which accounts for about 92% of global demand. At present, more than 90% of vanadium is produced by South Africa, China and Brazil.

A growing segment is the supply of vanadium oxide for battery applications.

In addition, TNG intends to produce hematite fines for export into the seaborne iron ore market.

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