TNG Limited has received in-principle approval for a landmark Native Title Mining Agreement covering its Mount Peake vanadium-titanium-iron project located 230km northwest of Alice Springs in the Northern Territory. Once the agreement is executed, the company will have a clear runway to finalise financing and site-based construction activities. With the vanadium markets hotting up TNG appears to be in the right business at the right time.
Serious ASX listed vanadium player TNG Limited is another step closer towards developing its globally significant Mount Peake vanadium-titanium-iron project in the Northern Territory after securing Aboriginal approval.
In a market update this week, the company said it had received in-principle approval for a landmark Native Title Mining Agreement.
The agreement is structured to ensure that employment, training and other benefits from the development of the giant Mount Peake Project will flow back to native title holders and the local community.
It will be executed by all parties once final procedural details have been completed.
In May, TNG received Federal environmental approval for the project that is located 230km northwest of Alice Springs.
Mount Peake has an Ore Reserve of 41.1 million tonnes grading 0.42% vanadium pentoxide, 7.99% titanium dioxide and 28% iron.
It is forecast to produce 243,000 tonnes of high-purity V2O5, 3.5 million tonnes of titanium pigment and 10.6 million tonnes of high-grade iron oxide during its initial 17 year mine life.
With the reserve representing just 30% of the measured and indicated mineral inventory, there is considerable scope for TNG to extend the mine life further if commodity prices hold up.
TNG Managing Director Paul Burton said: “This is a major step forward for the Company and our shareholders which will lead to security of tenure and approval for the development of our proposed mining operation at Mount Peake.”
“We will now liaise with Native Title Mining Agreement parties to ensure that the agreement is executed as soon as practicable and that thereafter the Mount Peake Mineral Leases are granted as quickly as possible.”
“This will, in turn, clear the way for the finalisation of our financing and site-based construction activities. The achievement of these key milestones will greatly assist our ongoing financing and off-take discussions.”
According to TNG, Mount Peake will generate an off-the-scale pre-tax NPV of A$4.7 billion on the back of a 44% IRR.
Upfront capital costs are expected to approach A$853m and include all Stage 1 infrastructure, mine site construction, a 3 million tonne per annum concentrator and associated processing plant.
TNG will link the mine by rail to an advanced hydrometallurgical metals refinery to be established in Darwin.
This will use the company’s proprietary “TIVAN” processing technology that produces high purity vanadium, titanium and iron oxide products without pyrometallurgical roasting, potentially lowering the cost of processing.
Interestingly, TNG already has a binding life-of-mine offtake agreement in place with Woojin Industries in South Korea, who will purchase a minimum of 60% of Mount Peake’s vanadium product.
The company also has an MOU in place with Wogen Pacific, based in Hong Kong, for the sale and marketing of its titanium product.
In addition to its use as a high strength steel additive, vanadium is increasingly in demand for vanadium redox flow batteries that are used for large-scale battery storage applications.
This demand has driven a 400% increase in vanadium pentoxide prices over the last two years to USD$17 a pound at the end of the June 2018 quarter.