Name of the Project
Mount Peake vanadium/titanium/iron project.

Location
Northern Territory, Australia.

Client
TNG.

Project Description
A definitive feasibility study (DFS) has outlined a world-class project with an initial 17-year mine life.

The project has a maiden probable ore reserve of 41.1-million tonnes (50% of mine life) at 0.42% vanadium pentoxide (V₂O₅), 7.99% titanium dioxide (TiO₂) and 28% iron oxide at a cutoff grade of 15% Fe.

The study has converted 65% of the measured resource, with a 50% increase in V₂O₅ grade.

The DFS is based on the production of magnetite concentrate on site in two stages at Mount Peake.

Stage 1 involves the construction of a three-million-tonne-a-year operation.

Stage 2 is planned for years 4 to 5, where mine production is projected to increase from three-million tonnes a year to six-million tonnes a year, and the capacity of the concentrator and refinery to double.

The DFS assumes that concentrate will be trucked to a rail siding and then railed north to a TIVAN refinery facility, located about 10 km from Darwin port. The facility will produce high-purity V₂O₅, TiO₂ concentrate and iron oxide from the magnetite concentrate.

Associated downstream plants will produce high-grade titanium pigment and pig iron.

The TIVAN refinery will have a design feed capacity of 900 000 t/y of magnetite concentrate and is proposed to expand to a maximum production capacity of 1.8-million tonnes in Year 5.

The refinery comprises feed preparation, leaching, solvent extraction and acid regeneration.

The DFS estimates average production of 17 560 t/y of V₂O₅, 236 000 t/y of TiO₂ (pigment) and 637 000 t/y of pig iron.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of A$4.9-billion and an internal rate of return of 41%.

Value
The preproduction capital cost is estimated at A$970-million, which includes all infrastructure, access/haul roads, mining, rail works, water supply, the Darwin refinery and port handling costs, as well as a concentrator, camp and tailings dam.

Duration
Subject to all approvals, permitting and financing being received, construction of Mount Peake is planned to start in 2016, with first production scheduled for early 2018.

Latest Developments
TNG has had preliminary meetings with Germany's KfW IPEX-Bank and received a positive hearing, with an expression of interest to conduct further due diligence ahead of possible mandating for finance for the development of its flagship Mount Peake vanadium/titanium/iron project.

The company has also engaged with other debt finance providers, including the North Australia Infrastructure Fund and Australia's Export Credit Finance Agency, Efic. "The extent of their potential involvement in the funding package is unknown at this stage, but we expect updates . . . shortly," TNG has stated.

The miner already has binding life-of-mine (LoM) agreements in place with Woojin Metals, a memorandum of understanding with trader Wogen for LoM sales and the marketing of titanium dioxide products, as well as an agreement with trader Gunvor for iron products.

The miner has also been in continued discussions with other interested parties for the remaining 40% of forecast vanadium pentoxide production while also discussing titanium pigment offtake with producers and end-users of pigment products.

TNG has also received proposals for the engineering, procurement and construction of the Mount Peake project and is reviewing potential partners that are best positioned and aligned with TNG's development objectives.

"The Mount Peake project business model could benefit from an increase in demand for vanadium pentoxide, as a result of the commodity's immense large-scale battery potential," the company has noted, adding that it has investigated and subsequently successfully produced commercial-grade vanadium electrolyte (VE) from Mount Peake.

"VE has a number of significant differences to other battery metals or materials. VE efficiency does not decay over time, is highly stable and is suitable for large complexes, towns and manufacturing sites. The long-term nature of the battery makes them ideal to replace static long-term diesel power," it stated.

Key Contracts and Suppliers
SMS Group (design, engineering and tendering for construction of the TIVAN downstream refinery).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
TNG, tel +61 8 9327 0900, fax +61 8 9327 0901 or email corporate@tngltd.com.au.
SMS Group, tel +49 211 881-0, fax +49 211 881 4902 or email communications@sms-group.com.