TNG strikes new deal with German partner to allow project construction by Australian companies
TNG’s balance sheet was strengthened further this week after it received a $5.14 million R&D tax rebate.
Northern Territory vanadium-titanium-iron project developer TNG Limited (ASX: TNG) has reached agreement with its German engineering partner, SMS Group, that paves the way for the Australian companies to be brought on board during construction of the processing operations at its Mount Peake operation.
This follows the decision last September to change the location of its planned Tivan processing and titanium pigment plants from Darwin to the Mount Peake mine site in the Northern Territory.
Previously, SMS was to provide a fixed-price engineering, procurement and construction proposal for the beneficiation plant at Mount Peake and the two downstream operations in Darwin.
Discussions to begin with Australian-based construction, engineering firms
Now, under the revised model, SMS will provide a commercial and technical proposal for engineering and procurement for the processing plant to be located at the mine site.
TNG says it will pursue discussions with Australian-based engineering and construction companies for the mine site beneficiation plant, titanium pigment plant and non-process infrastructure, as well as for the Tivan processing plant and associated infrastructure.
TNG managing director and chief executive officer Paul Burton thanked SMS for its understanding and agreeing to TNG’s proposals.
“Reaching agreement with SMS on this new way forward for delivering the Mount Peake project provides us with the flexibility we need to achieve an optimal project delivery outcome,” he added.
BOO and BOOT options to be explored to reduce capex
The decision to abandon the Darwin plans will allow TNG to develop a fully integrated mining and processing operation at Mount Peake, which is 235km north of Alice Springs.
Project debt financier, KfW IPEX-Bank, is supporting TNG’s new project model.
TNG will also progress build-own-operate (BOO) and build-own-operate-transfer (BOOT) options to reduce its capital outlays.
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.
The company 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.