Announcement • Feb 15
TNG Limited Provides an Update on the Key Work Streams Being Undertaken for the Delivery and Development of Its 100%-Owned Mount Peake Vanadium-Titanium-Iron Project
TNG Limited provided an update on the key workstreams being undertaken for the delivery and development of its 100%-owned Mount Peake Vanadium-Titanium-Iron Project, located in the Northern Territory. The Company's strategy for the Mount Peake Project is to develop a fully-integrated single mining and processing operation to produce three high-value, high-purity products for export vanadium pentoxide (V2O5), titanium dioxide pigment (TiO2) and iron oxide (Fe2O3) through the application of a world-first processing technology, known as the TIVAN® Process, which is owned exclusively by TNG. Vanadium and titanium have been identified by the Australian Government as critical minerals required to make advanced technologies that will support the global push for decarbonisation. TNG has life-of-mine binding off-take agreements in place for 100% of all products proposed to be produced from the Mount Peake Project with strong off-take counterparties with a multi-national presence. Clough Projects Australia Pty Ltd, is advancing the Stage 2 design and value engineering works for the integrated Mount Peake Project, which comprises a Beneficiation Plant, TIVAN® processing facility (including a Pigment Plant) and plant utilities located within the Mining Lease footprint of Mount Peake mine site. This phase of works follows the completion of an integrated layout by Clough, which was based on the deliverables prepared under the Front-End Engineering and Design ("FEED") study completed by SMS group ("SMS"). Clough has assembled a team of specialists for the Mount Peake Project encompassing Process, Mechanical, Electrical, Procurement, and schedule planning in order to rapidly complete the following scope of work: update overall Beneficiation Plant and TPF layout; update power usage and demand; update water usage and demand; update the mechanical equipment list; develop single line diagrams; update the major electrical equipment list for transformers and sub-stations; source pricing for major mechanical and electrical equipment; develop a project implementation schedule; prepare an updated Navisworks 3D model; prepare updated drawings detailing the Mine Site, access road, accommodation village and key infrastructure; extract mechanical general arrangement and elevation drawings for the integrated Project; and update the water balance for the integrated Project. This work is expected to be completed by May 2022. Validation testwork that had been delayed due to the global COVID-19 restrictions affecting workforce availability of SMS staff and the procurement of materials to undertake the testwork is underway. The validation testwork is being carried out in Australia and Austria, with completion expected to occur in thecoming months. Hydrogen Reductant TNG has assessed opportunities within the Project and the processing flowsheet to reduce the overall net carbonfootprint. This includes an ongoing technical and commercial assessment of the use of hydrogen reductant in thecurrent flowsheet. Hydrogen reduction testwork is underway, running in parallel to the current engineering and design work as a potential optimisation initiative. Non-Process Infrastructure ("NPI")The new integrated mining and processing operation at the Mount Peake mine site has provided the opportunity for consolidation of a number of infrastructure items including power generation, gas supply and communications installations. The NPI will require upgrading in a number of areas to support a larger operation, including tendering for villageaccommodation, camp catering and borefield (water supply). The Company's Project Team is exploring Build Own Operate and Build Own Operate Transfer ("BOO/BOOT")arrangements, having previously engaged, tendered and shortlisted several proponents and reviewing the NPI forthe Project including updated design and tendering processes as required. In April 2021, TNG's hydrogeological consultants submitted a water extraction licence application ("WELA") forwater supply for the mine site and Beneficiation Plant requirements. This approval is expected imminently.With the expanded operation, additional water supply will also be required and new program of water bore drilling("Program") is planned to commence in early April 2022 to establish the availability of additional water supply for the integrated operation. The Program was originally scheduled to start in early March 2022, however it has been delayed due to recent flooding of the areas to be drilled, which has restricted access. The program, which will be supported by bore pump testing and aquifer modelling and reporting will allow an additional WELA to be submitted. This information will also allow pipeline and water distribution design works and infrastructure to be updated, as well as support and inform the environmental assessment report which is currently in progress. The Company has progressed the project execution model to support the delivery of an integrated and mining and processing operation at the Mine Site. TNG is assessing revised proposals from SMS and Clough for the delivery of the Mount Peake Project, while retaining production and product quality guarantees for the downstream processing operation. The process to update the project execution schedule includes a detailed review of the contracting strategy fordelivery of both the processing plants and NPI, early contractor involvement strategies, Build Own Operate andBuild Own Operate Transfer planning, and project management structure. The Company expects to finalise a revised project execution model in the coming months. The utilisation of existing plant capacity is very high (above 95%)and the current inventories are very low. The price of TiO2 has increased in all regions in the last 12 months, up 35.4% in China, 27.6% in APAC, 11.6% in Europe and 11.5% in North America. Persistent constraints on feedstock will continue and are expected to increase in 2022. Feedstock prices have increased in the last 12 month, with ilmenite from China up 54.5% and rutile from Australia up 18.9%. The market price is expected to continue its momentum in 2022 and beyond due to strong paint demand in housing,the depletion of large feedstock deposits and the temporary shutdowns at some pigment plants during the yeardue to operational and supplier issues. Analysts expects these trends to continue at least until 2023-24.