TNG Limited is pleased to advise that an internal technical review of the July 2012 Pre-Feasibility Study (PFS) for its flagship Mount Peake Vanadium-Titanium-Iron Project in the Northern Territory, has led to a significant enhancement of the Project’s economics following the identification of a mis- calculation of the value of the iron component of the resource. The technical review of the July 2012 PFS was conducted ahead of the planned commencement of a Definitive Feasibility Study (DFS) for the Mount Peake development later this year. It identified that the price for the hematite product at Mount Peake had incorrectly been applied to contained iron (Fe) as opposed to contained iron oxide (Fe2O3).

As a result of this finding, the original financial model for the Mount Peake PFS has been verified and updated by Snowden Mining Industry Consultants Pty Ltd leading to:
an increase in life-of-mine (LOM) revenues from A$11.8 billion to A$13.6 billion;
an increase in Net Present Value (NPV8%) from A$1.884 billion to A$2.646 billion; and
an increase in pre-tax IRR from 31.8% to 38.7%.
Full details of the Mount Peake Pre-Feasibility Study are available in the Company’s ASX Announcement – 9th July 2012.

The results dramatically enhance the financial strength of the proposed Mount Peake mining operation and provide strong momentum for the upcoming DFS. TNG is aiming to commence construction of the project in 2014, with production and exports proposed to commence in 2015. Commenting on the result, TNG’s Managing Director, Mr Paul Burton, said it was an exciting, if somewhat unexpected, boost for the Project. “Based on the revised economic model, the Mount Peake development is even more robust than initially thought and is shaping up as an outstanding growth asset for TNG shareholders,” he said.

TNG has recently announced several key agreements to progress the Mount Peake DFS, including:
Appointing leading global engineering and environmental consulting group, GHD, to complete the Environmental Impact Study (EIS);
Signing a Memorandum of Understanding (MoU) with a leading Austrian/German-based international engineering, metallurgical, development, and technology company and plant supplier for discussions regarding the commercial development of the TIVAN® hydrometallurgical process;
Signing a formal agreement with the Commonwealth Scientific & Industrial Research Organisation (CSIRO) for the completion of a definitive pilot plant trial, representing the next phase in the Company’s metallurgical testwork program;
Signing a Heads of Agreement (HoA) with the Darwin Port Corporation (DPC) to negotiate the use of Darwin’s East Arm Wharf port facilities for the export of vanadium, iron and titanium products from the Mount Peake operation.
The Company expects to announce the award of the contract to complete the Mount Peake DFS later this month.