TNG Limited is pleased to advise that it has commenced studies as part of the ongoing Definitive Feasibility Study on its Mount Peake Vanadium-Titanium-Iron Project in the Northern Territory to assess the potential for staged development of the project. Following the recent transfer of management of the DFS in-house, the Company has completed internal reviews indicating that it could generate substantial revenues from a low CAPEX start-up development producing a magnetite concentrate. TNG recently submitted Notice of Intent (NOI) to the Northern Territory Government of confirming its intention to proceed with the development of Mount Peake.

Based on the 2012 Pre-Feasibility Study (PFS), internal reviews were conducted to consider the feasibility of an early cash flow, low CAPEX scenario where a magnetite concentrate is produced on site at Mount Peake and shipped to a steel mill in China. These reviews are now complete and show that the Company could generate significant gross revenues from a Stage 1 development together with a lower capital expenditure estimate of $230M for the on-site beneficiation of crushing and magnetic separation to produce the concentrate.

Comparisons were made based on 5Mtpa and 10Mtpa mining rate, using current and forecast ferro-vanadium (FeV) prices. Independent commodity analysts forecast FeV demand and pricing to double by 2015. At 5Mtpa current prices estimated annual revenues are $40 million, using a conservative exchange rate of 1 USD:1AU, however with forecast 2015 FeV prices this increases to $84 million. Using 10Mtpa, estimated annual revenues using current and forecast prices are in the order of $100-200 million respectively.

Construction of the mining, crushing and magnetic separation facility at Mount Peake is part of the overall development of the project. TNG is currently reviewing the most suitable location for the downstream TIVAN™ processing plant. By moving ahead with a staged development, TNG has the potential to realise an early cash flow of at least $40 million per annum and construction could potentially start by late 2014, while finalising the development and location for the TIVAN plant, before it is constructed and commissioned. The steel mill receiving the magnetite concentrate would produce a pig iron and ferrovanadium product.

Stage 2 would involve the magnetite concentrate going straight to the TNG’s TIVAN process once commissioned, for the higher value, high purity iron, vanadium and titanium oxide production. Independent studies have shown that these strategic metal products will be in high demand in the emerging high technology and power storage sectors and likely to command higher prices. The PFS showed that this would produce annual pre-tax revenues as high as $295 million over a 20-year mine
life.

TNG has had positive preliminary discussions with the Port of Darwin, the rail operator Genesee & Wyoming and with a Chinese steel manufacturer regarding this potential approach. Further details will be announced if formal pricing and off-take agreements are reached. TNG’s Managing Director Paul Burton said potential for a staged development approach was a positive development for the Mount Peake Project, with the Company intending to vigorously pursue this opportunity as part of its final Definitive Feasibility Study. “This represents another promising avenue for project enhancement and de-risking,” Mr Burton said. “with a lower initial CAPEX requirement. It is also worth noting that vanadium and titanium prices have remained remarkably resilient, even while other commodity prices have been in decline.”