PERTH (miningweekly.com) – ASX-listed vanadium developer TNG has flagged an estimated A$43-million capital cost reduction in the development of its Mount Peake vanadium/titanium/iron project, in the Northern Territory, by relocating the downstream TIVAN hydrometallugrical processing plant to Malaysia.

As part of the definitive feasibility study (DFS) into the Mount Peake project, an independent review has been conducted to assess the potential of relocating the TIVAN processing plant overseas.

TNG said on Tuesday by relocating the processing plant to Malaysia, the company could save not only on capital cost, but also operating costs, which would reduce from the A$76/t estimated in the prefeasibility study, to A$74/t.

Furthermore, net annual cash flow would increase from A$395-million to A$420-million, while pre-tax net present value would increase from A$2.6-billion to A$2.8-billion and the internal rate of return would increase from 38% to 43%.

However, the Mount Peake project’s total transport costs would also increase from A$57/t to A$66/t.

The project’s life-of-mine revenue was expected to remain unchanged at A$13.6-billion, as product sales and pricing expectations have not changed.

TNG told shareholders on Tuesday that the results of the independent study enhanced the company’s current view of the financial strength of the Mount Peak operation, and provided strong momentum for the board to progress the evaluation of a Malaysia-based processing plant, as part of the DFS.

In addition, TNG noted that the Malaysian government could provide certain incentives to attract chemical processing to the region, such as the potential for multi-year tax-free allowances and cost-effective power and water agreements.

MD Paul Burton said that a degree of uncertainty existed regarding the long-term competitive gas pricing in the Northern Territory, adding that it was prudent for TNG to look at all its options, including an offshore location for the TIVAN processing plant.

“This study certainly indicates that a Malaysian or other offshore location could deliver some very important benefits for the economics of the Mount Peake mining operation, and we will now investigate this potential further as part of the DFS.”

TNG has now engaged an environmental consultant in Malaysia to provide technical and scientific support to facilitate meetings with the government departments, and for the land selection process.