Australian strategic metals company TNG Limited (ASX: TNG) has signed a binding life-of-mine offtake and marketing agreement with market expansion services specialist DKSH for the sale of up to 100% of titanium dioxide pigment produced from the flagship Mount Peake vanadium-titanium-iron project in the Northern Territory.
The agreement follows a binding term sheet signed with DKSH in October whereby the parties agreed key terms for the offtake.
Under the terms of the life-of-mine agreement, TNG will sell up to 150,000 tonnes per year – or 100% of its titanium dioxide production – on a free-on-board basis for DKSH to distribute to regions worldwide excluding the Iberian Peninsula and European Nordic countries.
TNG already has a binding life-of-mine offtake agreement in place with Korean group WOOJIN Metals for a minimum 60% of vanadium output from Mount Peake, as well as binding terms for iron product with Singapore-based global commodity trader Gunvor Group.
The finalisation of a titanium dioxide agreement means TNG will have sales contracts in place for all three of its high-value products to support its funding and commercialisation strategy for Mount Peake.
The DKSH agreement centres around output from the proprietary TIVAN hydrometallurgical technology which TNG announced last year would incorporate a “technological breakthrough” allowing titanium feedstock to be directly used for the production of a high-grade titanium dioxide pigment without the need for further beneficiation.
Directly using the high-grade feedstock – which is the residue directly out of the TIVAN process, after the vanadium and iron have been extracted – without the need for additional upgrades significantly reduces the cost and complexity of the process.
Managing director Paul Burton said the latest offtake agreement marks an important milestone in the progress of the world-class Mount Peake project.
“This is a really exciting milestone for [us] and marks the formalisation of our strong relationship with DKSH,” he said.
“DKSH is a great fit for us given the technological breakthrough we achieved last year with [TIVAN] and we are looking forward to working closely with them as we complete the funding package for Mount Peake and move the project towards development and construction.”
At mid-afternoon, shares in TNG were trading 35% higher at $0.135.