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

Client
TNG.

Project Description
Mount Peake comprises a large strategic measured, indicated and inferred resource of about 160-million tonnes of magnetite-hosted vanadium, titanium and iron.

The prefeasibility study envisages the construction of a processing plant, with an initial capacity of 2.5-million tonnes a year, increasing to five-million tonnes a year.

Leaching, followed by selective iron and vanadium recovery using the TIVAN process, will be employed.

The proposed plant will comprise eight major processing areas – crushing, grinding and beneficiation, leaching, titanium beneficiation, solvent extraction, acid regeneration, tailings disposal and vanadium precipitation.

Total metal production is estimated at 245 000 t of vanadium, 20.3-million tonnes of iron and 6.5-million tonnes of titanium.

Net Present Value/Internal Rate of Return
Not stated.

Value
The total cost of the project is estimated at A$715-million, including A$563-million for the initial 2.5-million-tonne-a-year plant and A$122-million for the expansion to five-million tonnes a year.

Duration
TNG aims to start construction in 2014, with production and exports proposed to start in 2015.

Latest Developments
TNG has signed an offtake agreement with Chinese raw materials supplier Sinometal, for product that its Mount Peake vanadium/titanium/iron project will produce.

The heads of agreement (HoA) focuses on the sale of between 500 000 t/y and one-million tonnes a year of magnetite concentrate from the Mount Peake operations to Chinese customers, specifically Chengde Iron and Steel Group.

The HoA also covers preproduction financing of up to A$5-million in return for the subsequent delivery of cargo, on favourable terms.

The HoA with Sinometal allows TNG’s product the flexibility to be sold into a variety of markets and to various producers, while also securing a strong strategic foothold in China.

MD Paul Burton says that the agreement represents a further major milestone for the company in its quest to secure globally significant strategic and commodity partners to develop the Mt Peake project.

“While there has been a short-term slowdown in the steel market in China, the fundamentals of the steel industry overall in that country remain extremely strong and the long-term demand outlook remains firm.”

Burton said that TNG remained confident that it could sell its magnetite concentrate, and that it was well placed to maximise the value of its agreement with Sinosteel to create substantial value for shareholders.

TNG is advancing its definitive feasibility study (DFS) on the project, which is considering a two-stage development approach where magnetite concentrate is produced and sold before refining to deliver an early cash flow for the company.

Key Contracts and Suppliers
Arccon Mining Services (DFS) and GHD (environmental-impact study).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
TNG, tel +61 8 9327 0900, fax +61 8 9327 0901 email corporate@tngltd.com.au.
Arccon Mining Services, tel +61 8 9340 6100, fax +61 8 9340 6150 or email mining@arccon.com.au.