03/08/2011 - 11:41

China buys 30% stake in TNG

03/08/2011 - 11:41

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China buys 30% stake in TNG

A Chinese state-owned group has taken a 30 per cent stake in Perth-based iron and vanadium developer TNG, in a deal worth $13.4 million.

TNG announced today it had signed a binding letter of intent with Jiangsu China Non Ferrous Metals Investment Holding Company (ECE), which is part of the East China Mineral Exploration and Development Bureau.

The agreement includes a $13.4 million investment at 11 cents per share that will underpin the ongoing pre-feasibility study and metallurgical test work at the Mount Peake iron and vanadium project in the Northern Territory, TNG said.

ECE will also be offered two positions on TNG’s board, and provide a $2 million loan to TNG to provide interim working capital until the end of the month.

ECE has also agreed to enter into a separate joint venture agreement in relation to TNG’s McArthur copper project in the Northern Territory.

The transaction remains subject to the completion of due diligence and regulatory board approvals.

TNG managing director Paul Burton said the partnership with ECE brought with it a number of substantial benefits.

“This has laid the foundations for a strong working relationship which we believe will give us access in the longer term to a range of attractive development and financing options for the Mount Peake project and other new projects,” Mr Burton said.

TNG shares had gained 5.3 per cent at 11:39AM (WST) to trade at 9.8 cents.

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