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 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, the Darwin refinery and port handling costs, as well as a concentrator, camp and 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
TNG has signed a binding term sheet with global commodities trader Gunvor for the life-of-mine offtake of iron produced at the Mount Peake project.

The binding term sheet encompasses key terms for the sale of up to 60% of the iron produced, including the buying of these products on a free-on-board basis and global distribution for a fixed commission.

Based on these terms, TNG and the Singapore-based Gunvor will work to complete a final binding life-of-mine sales and purchase offtake agreement for the Mount Peake iron products.

The agreement marks another milestone for the Mount Peake project and builds on the landmark offtake agreement signed in September last year with Woojin, which covered a minimum of 60% of the vanadium products produced at Mount Peak over its 15-year mine life.

Key Contracts and Suppliers
SMS Group (design, engineering and tendering for construction of the TIVAN downstream refinery).

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 or email corporate@tngltd.com.au.
SMS Group, tel +49 211 881-0, fax +49 211 881 4902 or email communications@sms-group.com.