TNG advances Mount Peake vanadium-titanium-iron project to pre-development stage, secures final offtake agreements

TNG ASX December 2020 quarterly Mount Peake Project vanadium titanium iron offtake
TNG's balance sheet was strengthened further this week after it received a $5.14 million R&D tax rebate.

Pre-development activities and the securing of final offtake agreements for the flagship Mount Peake vanadium-titanium-iron project in the Northern Territory were a priority focus for strategic metals company TNG Limited (ASX: TNG) in the three months to December 2020.

The company confirmed in its quarterly report that a front-end engineering and design (FEED) study for the project had achieved 80% completion while a life-of-mine offtake and marketing agreement had been locked in with global commodity trader Gunvor (Singapore) for 40% of Mount Peake’s proposed 6,000 tonnes per annum high-purity vanadium pentoxide output.

The company already has a binding life-of-mine offtake agreement in place with Woojin (Korea) for 60% of the project’s forecast vanadium pentoxide production.

It finalised similar agreements during the period with market expansion provider DKSH (Switzerland) for a minimum 75,000t and up to 100% of titanium dioxide production; and with Vimson Group for all of the Darwin facility’s planned production of 500,000tpa of high-grade (+64%) iron ore fines for global marketing and distribution.

Mount Peake is one of the largest undeveloped vanadium-titanium-iron projects in the world and one of the most advanced currently at pre-development stage.

Non-process infrastructure

In parallel with the FEED study, TNG advanced discussions during the quarter with providers of non-process infrastructure required at the Darwin TIVAN processing facility and the mine site’s beneficiation plant, including haul roads, bore fields, accommodation camp, and logistics and power supply equipment.

The company also continued to evaluate the incorporation of a wastewater treatment plant into the Darwin facility as an option for reducing water demand, processing water discharge and lowering operational expenditures.

VRFB unit

A vertical integration strategy for Mount Peake saw TNG launch a vanadium redox flow battery business unit in November via green energy-focused subsidiary TNG Energy Pty Ltd.

The company subsequently announced the appointment of Broome-based Generators and Off-Grid Energy and Brisbane’s juwi Renewable Energy to provide business development and specialist technical advice, respectively.

Entitlement issue

TNG conducted a 1-for-9 non-renounceable pro rata entitlement issue during the period at $0.10 per share, raising $8.77 million before costs and representing an overall take-up rate of approximately 70%.

Funds will be used to complete design, engineering and approvals work streams and pre-development planning at Mount Peake as the company moves towards a final investment decision.

Financials

At 31 December, TNG had $9.34 million cash at hand (including proceeds from the entitlement issue) and received $39,500 from the repayment of 500,000 shares under a share plan for non-executive directors and consultants.

Payments for development, engineering, exploration and evaluation activities for Mount Peake Project totalled $2.5 million during the period.

Payments to related parties of TNG totalled $211,000, and included directors’ remuneration (including salaries, fees and superannuation) and fees for additional services provided.

The company’s balance sheet was further strengthened this week with a $5.14 million research and development rebate under the Australian Government’s tax incentive scheme.

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