TNG to revise Mount Peake project delivery model to factor in COVID-19 challenges

TNG Limited ASX Mount Peake Vanadium-Titanium-Iron Project Northern Territory SMS group FEED
TNG is in talks with SMS Group to revise the execution plan for its NT vanadium-titanium-iron project to address ongoing commercial and logistical challenges.

Resource and mineral processing technology company TNG Limited (ASX: TNG) is continuing to advance the delivery and development of its wholly-owned Mount Peake vanadium-titanium-iron project in the Northern Territory.

In an update to the market, the company said its project engineering team is progressing a detailed audit of the front-end loading (FEL)-3 report previously submitted by German-based SMS Group.

This review includes weekly virtual meetings with SMS’ engineering team in Germany for clarification and final revision purposes, as well as for the identification of areas that could benefit from value engineering. Final test work to confirm certain key process assumptions and valuate further potential for technical optimisation is also being finalised.

Project execution model revision

TNG and SMS are also in discussions to revise and optimise the project execution model to address the ongoing commercial and logistical challenges associated with the global COVID-19 pandemic.

Under the current agreement, SMS was expected to prepare a fixed-price engineering, procurement and construction (EPC) proposal for the delivery of the Mount Peake beneficiation plant and the TIVAN processing facility in Darwin following the recent completion of the front-end engineering and design (FEED) study.

However, TNG said it considered any “fixed-price EPC proposal” could include substantial extra contingencies for project delivery in light of pandemic-related challenges such as severe travel restrictions, global workforce shortages, increased construction and engineering costs and disruptions to supply chain logistics. It hopes that a revision of the execution model could “maintain capital expenditure at an attractive level”.

In the meantime, SMS will continue to provide all downstream processing plant, production and product quality guarantees for the project, engage local Australian engineering and construction companies for the mine site beneficiation plant, and accept any build-own-operate and build-own-operate-transfer (BOO/BOOT) opportunities.

“Discussions have been positive and SMS remain supportive of continuing a major contracting role during the project’s further construction development and implementation phase,” TNG reported.

“Initial discussion with the company’s existing potential financiers indicate that such an arrangement is not expected to have any negative affect on the financing structures currently being evaluated or reduce the number of financing options potentially available,” it added.

TIVAN processing facility environmental approval process

Meanwhile, TNG said it is “well advanced” in a comprehensive assessment of alternative locations for the site of its TIVAN processing facility in Darwin.

This additional information has been requested by the NT Environmental Protection Authority to supplement the company’s draft environmental impact statement.

This alternative site assessment is being prioritised by TNG’s project engineering team and is expected to be completed by the end of August.

“The company had previously considered a number of potential alternative sites and is therefore well advanced in this process,” TNG stated.

Partnership talks

TNG is continuing talks under a heads of agreement with AGV Energy and Technology involving the integration of vanadium redox flow batteries (VRFB) with AGV’s green hydrogen production technology HySustain, as well as commercialisation opportunities for the HySustain technology in Australia.

The company is also progressing negotiations with Singapore-based VRFB technology company V-Flow Tech on a formal joint venture agreement to advance fully integrated renewable energy supply and battery storage solutions in Australia.

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