29/07/2009 - 16:35

TNG vanadium project to cost $500m

29/07/2009 - 16:35

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Subiaco-based resources company TNG says its Mount Peake vanadium project in the Northern Territory is economical despite a $500 million price tag.

Subiaco-based resources company TNG says its Mount Peake vanadium project in the Northern Territory is economical despite a $500 million price tag.

 

The announcement is below:

 

Australian resources company TNG Limited (ASX: TNG) is pleased to report the conclusions of the initial Scoping Study completed on the Company's 100%-owned Mount Peake Vanadium Project in the Northern Territory.

TNG commissioned Snowden Mining Industry Consultants (Snowden) to undertake the optimisation work for the Study to assess project viability and assist in planning ongoing exploration activities at Mount Peake.

The initial study considered the viability of an open pit mining operation study using a marginal cut-off of 0.22 % vanadium pentoxide (V2O5), conservative V2O5 price of US$8/lb, and processing of 5mt per year, with an estimated capital cost of between $400 - 500m.

Despite the high capital cost the results demonstrated viable project economics given the parameters and assumptions of this initial study.

Metallurgical cost and recovery estimates for the Study were supplied by Mineral Engineering Technical Services (METS), who are carrying out metallurgical testwork to optimise recovery and grade on the Mount Peake ore.

The capital cost has been estimated based on information supplied by METS who are undertaking the metallurgical test work. This work is ongoing and the final processing route not yet been established.

TNG is encouraged by the results of the initial Scoping Study, particularly as this optimisation has been based on TNG's maiden Inferred Mineral Resource of 107 million tonnes at a grade of 0.32% V2O5, 5.9% TiO2, 29% Fe, estimated from its first round of drilling on the project. A significant portion of the Mount Peake magnetic anomaly remains untested and offers the potential to increase the initial resource and further enhance the project's economics.

The Board of TNG is pleased with the results and will now consider the optimum route to progress the Mount Peake Project to the next phase, including the possibility of introducing a joint venture partner to fund ongoing resource drilling and project feasibility work.

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