TNG seals Chinese offtake deal for Mt Peake project
PERTH (miningweekly.com) – Vanadium developer TNG signed an offtake agreement with Chinese raw materials supplier Sinometal, for product that its Mt Peake vanadium/titanium/iron project, in the Northern Territory, will produce.
The heads of agreement (HoA) was focused on the sale of between 500 000 t/y and one-million tonnes a year of magnetite concentrate from the Mt Peake operations to Chinese customers, specifically Chengde Iron and Steel Group.
The HoA also covered pre-production financing of up to A$5-million in return for the subsequent delivery of cargo, on favourable terms.
TNG said on Monday that its HoA with Sinometal allowed the company’s product the flexibility to be sold into a variety of markets and producers, while also securing a strong strategic foothold in China.
MD Paul Burton said that the agreement represented 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 was aiming to start construction at Mt Peake this year, with first production scheduled for 2015.
TNG was currently advancing its definitive feasibility study on the project, which was considering a two-stage development approach where magnetite concentrate was produced and sold prior to refining to deliver an early cash flow for the company.
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