PERTH (miningweekly.com) – ASX-listed TNG was assessing the viability of a staged development at its Mount Peake vanadium/titanium-iron project, in the Northern Territory, as part of an ongoing definitive feasibility study (DFS).

The miner said on Monday that preliminary reviews indicated that substantial revenues could be generated from a low capital start-up development, producing a magnetite concentrate.

A prefeasibility study had previously found that the Mount Peake project could support a 2.5-million-ton-a-year operation, with a life-of-mine of some 20 years. The project could be expanded to a five-million-ton-a-year operation after the first three years, to deliver yearly production of 15 300 t of vanadium oxide, 375 000 t of titanium dioxide concentrate and 1.13-million tons of iron oxide.

The internal reviews were conducted to consider the feasibility of early cash flow from a magnetite concentrate which would be produced on site and shipped to a steel mill in China.

TNG said on Monday that the internal review indicated that revenues could be generated from a Stage 1 development together with a lower capital expenditure estimate of A$230-million for the on-site beneficiation of crushing and magnetic separation to produce the concentrate.

Comparisons were made based on a five-million-tonne-a-year and a ten-million-tonne-a-year mining rate, using current and forecast ferrovanadium prices. At five-million tonnes, yearly revenues were estimated at between A$40-million and A$84-million, while the ten-million-tonne operation would generate revenue of between A$100-million to A$200-million.

Stage 2 of the project would involve the magnetite concentrate going straight to the TIVAN process, once commissioned, for the higher value, higher purity iron, vanadium and titanium oxide production.

MD Paul Burton said that the potential for a staged development approach was a positive development for the Mount Peake project with the company intending to “vigorously” pursue the opportunity.

“This represents another promising avenue for project enhancement and de-risking, with a lower initial capital expenditure requirement. It is also worth noting that vanadium and titanium prices have remained remarkably resilient, even while other commodity prices have been in decline,” Burton added.

The DFS on the Mount Peake project was expected in the fourth quarter of this year, with construction slated to start in 2014, and first production and exports expected in 2015.