PERTH (miningweekly.com) – Vanadium developer TNG has signed a binding term sheet with Korean ferro-vanadium producer Woojin Industrial for the sale of up to 60% of the vanadium produced from the Mount Peake project, in the Northern Territory.

Under the terms of the agreement, Woojin would purchase a minimum of 60% of the refined vanadium pentoxide produced at Mount Peake, with the offtake negotiations to be conducted at arm’s length at a price based on a predetermined formula.

TNG MD Paul Burton said on Tuesday that the rapid progress to a binding term sheet with Woojin for the majority of the expected vanadium production at Mount Peake marked another important step in the company’s strategy to attract tier one global partners to support the financing, development and offtake of Mount Peake.

“Having Woojin involved right from the beginning of the Mount Peake development is a significant advantage for us. They are one of the world’s leaders in ferro-vanadium production, with a strong research and development capability, and a considerable depth of marketing expertise in the vanadium industry.”

The vanadium offtake term sheet followed a November signing of an offtake agreement with Chinese raw materials supplier Sinometal for between 500 000 t/y and one-million tonnes a year of magnetite concentrate from the Mount Peake operation.

Burton added on Tuesday that the term sheet with Woojin further de-risked the Mount Peake project and significantly underpinned the project’s revenue forecast.

“We expect that a long-term offtake agreement will be concluded within three months, putting us in a very strong position to move ahead with the project financing as soon as the feasibility study is finalised and delivered, which is on track to occur by mid-2015.”

Burton noted that further discussions with Woojin were also continuing, with a number of synergies identified between the two groups.

The Mount Peake definitive feasibility study is considering a two-stage development approach where magnetite concentrate is produced and sold prior to refining to deliver an early cash flow for the company.