TNG Limited (ASX: TNG) has secured the mineral leases for its wholly-owned flagship Mount Peake vanadium-titanium-iron project in the Northern Territory, with this latest milestone clearing the way for the company to pursue project development financing.
The mineral leases cover where the Mount Peake open pit mine will be located, as well as associated infrastructure including processing plant, camp site and rail loading facilities.
According to TNG managing director Paul Burton, the mineral leases afford the company security of tenure, and pave the way for TNG to advance discussions with potential project financiers.
“We are rapidly ticking off the boxes towards the Mount Peake development, with key announcements over the past few months including the signing of a native title agreement, the signing of a binding term sheet for titanium offtake with Swiss commodity trader DKSH, and now the formal award of the Mount Peake mineral leases by the NT Government,” Mr Burton added.
Capital requirements for Mount Peake
A definitive feasibility study has proposed a two-stage operation, with the first stage pre-production capital expenditure estimated at $853 million to construct a 3 million tonne per annum operation that can produce 243,000t of vanadium pentoxide, 3.5Mt of titanium dioxide pigment and 10.6Mt of iron over 17 years
The study projects Mount Peake will bring TNG a life of mine cash flow of $11.7 billion – equating to about $738 million a year.
TNG has developed its own proprietary TIVAN process for extracting the three high-purity commercial products from the Mount Peake ore and the project has been de-risked with binding offtake agreements in place for all three of the materials.
Market demand for vanadium pentoxide, titanium dioxide and iron is expected to grow substantially through to 2025, with the vanadium pentoxide price up 900% in the past two years, alone, while the titanium dioxide price has risen 40% and the pig iron price is up 60%.