Name and Location
Mount Peake vanadium/titanium/iron project, Northern Territory, Australia.

Client
TNG.

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

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

From the magnetite concentrate, the TIVAN facility will produce high-purity vanadium V₂O5, TiO₂ concentrate and Fe.

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.

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, and the Darwin refinery and port handling costs, as well as a concentrator, a camp and a 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
The share price of ASX-listed TNG spiked by more than 21% on September 7, after the company signed a binding life-of-mine (LoM) offtake agreement on its Mount Peake vanadium project, in the Northern Territory.

The offtake agreement with Korean ferrovanadium group Woojin covers a minimum of 60% of all vanadium products produced at the project over its 15-year mine life.

Woojin will buy the vanadium product at a yearly-agreed market price under a life-of-mine (LoM) take-or-pay agreement, which incorporates a guaranteed minimum price of 20% in addition to TNG’s cost of production estimates.

TNG has also inked a binding LoM technology transfer agreement with Woojin to use its proprietary technology for the production of ferrovanadium at the TIVAN refinery site. This will enable TNG to diversify its product portfolio by adding a product that is directly saleable to major steel mills and to potentially profit from the price advantage over the life of the project.

TNG MD Paul Burton has said the signing of the first-ever offtake agreement represents a huge milestone for the company and for the Mount Peake project.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
TNG, tel +61 8 9327 0900, fax +61 8 9327 0901 or email corporate@tngltd.com.au.