JOHANNESBURG (miningweekly.com) – Australian strategic metals company TNG has, in conjunction with its strategic partner engineering group SMS, identified potentially transformational capital and operating cost savings for its flagship 100%-owned Mount Peake vanadium/titanium/iron project in the Northern Territory.

Testwork performed by SMS during the year demonstrated a substantial reduction in utility and energy consumption, estimated to be about A$57/t of concentrate processed, compared to definitive feasibility study (DFS) figures.

On the basis of the DFS assumptions, this should result in an overall operating cost saving of more than A$50-million a year for the first phase of the project, at a three-million-ton-a-year mining rate.

Further refinement of the Tivan process has also resulted in the introduction of a simplified and significantly more cost effective method of vanadium extraction, leading to a reduction in both operating costs and capital costs.

SMS introduced an oxidative precipitation step following the production of magnetite concentrate and the Tivan leach phase, which replaces the solvent extraction circuits and precipitates a vanadium compound by atmospheric oxidation, from which TNG has the option to produce both very high-purity vanadium pentoxide or ferro-vanadium, therefore increasing the number of potential products from Mount Peake’s planned production.

This new method – combined with parallel refinements in other areas of the processing plant stemming from the ongoing engineering activities – results in significantly improved recovery of vanadium of up to 98% compared to the expected 90% used in the DFS, providing further upside to TNG in the overall amount of vanadium production and a corresponding expected increase in project revenue.

As the redesigned vanadium extraction circuit requires less complex equipment, a comparable reduction in plant capital expenditure is also expected.

TNG MD Paul Burton said the work being undertaken with SMS group represented a potential “game-changer” for the Mount Peake project.

“We have been doing a huge amount of behind-the-scenes work with SMS and all of our other consultants to optimise the operating costs of the Tivan refinery. We are delighted with the outcomes, which should result in a significant reduction in operating costs for all our products, derisk the process further, expand the range of products to be delivered and allow further optimisations to be considered.

“While it is not yet possible to quantify these savings, we expect them to have a significantly positive impact on the project’s economics and our ability to complete a suitable project financing package,” he added.

The company is also expecting a significant reduction on the preproduction capital estimate for the project, which the 2015 DFS put at $980-million.