TNG Limited:December 2020 Quarterly Activities Report
• Front-End Engineering and Design (“FEED”) study for the Mount Peake Project achieved 80% completion.
• Life-of-Mine Off-take and Marketing Agreement completed with major global commodity trader Gunvor
(Singapore) for 40% of the vanadium pentoxide to be produced by Mount Peake.
• Mining Management Plan (“MMP”) for the Mount Peake Mine Site submitted ahead of schedule to the
Department of Industry, Tourism and Trade with revisions to cover matters raised by the Northern Territory
Government (“NTG”).
• Supplement to the Draft Environmental Impact Statement (“EIS”) for the Company’s Darwin TIVAN® Processing
Facility (“DPF”) on track for delivery at the end of January 2021.
• Technical viability of a customised wastewater treatment plant for the DPF confirmed and included in the
project design plans.
• Vanadium Redox Flow Battery business unit successfully established as part of TNG’s vertical integration
strategy for the Company.
CORPORATE
• 1-for-9 non-renounceable pro-rata entitlement issue completed, raising approximately $8.77 million to
progress the Mount Peake Project towards a Final Investment Decision.
• 2020 Annual General Meeting held virtually on 30 November 2020.
• Debt financing mandate with the Company’s exclusive senior debt advisor and arranger, Germany’s KfW IPEXBank
GmbH, extended to 11 December 2021.
• The Company’s cash position at 31 December 2020 was $9.34 million.
COVID-19
The Company’s project management team and other staff continue to work under standard working hours and arrangements, with provision for flexible or restricted working arrangements when required.
All necessary health and safety precautions continue to be adhered to.
The Company is closely monitoring the COVID-19 situation in Australia and internationally, including new measures implemented recently by governments around the world, mainly in Europe, and for any potential impacts on the
Project.
MOUNT PEAKE VANADIUM-TITANIUM-IRON PROJECT (TNG: 100%)
Project Summary and Details
Mount Peake is one of the largest undeveloped vanadium-titanium-iron projects in the world and one of the most advanced currently at the pre-development stage (refer to Appendix A of this report for a full statement of the Mount Peake Mineral Resource).
Mount Peake Project Progress, Planning and Development
Front-End Engineering and Design Study
During the quarter, the SMS group (“SMS”) progressed key work streams in the comprehensive FEED study for the Mount Peake Project. SMS has advised the Company at the end of the quarter that 80% completion had been achieved.
The following key items were advanced during the period:
• Digitising of FEED Process and Instrumental Diagrams;
• Joint review of the 3D model for the DPF and Beneficiation Plant;
• Advancing the update of the Major Equipment List;
• Development of a high-level Project Management Delivery Model – Project Execution Plan; and
• Ongoing confirmatory and validation testwork programs at both European and Australian laboratories.
Non-Process Infrastructure (“NPI”)
In parallel with the FEED study, the Company completed the NPI work for the FEED process and have advanced discussions with providers for NPI required at both the DPF and the mine site Beneficiation Plant, which includes haul roads, bore fields, accommodation camp, logistics infrastructure and power supply.
The Company also received updated logistics pricing from One Rail Australia.
Wastewater Treatment Plant (“WWTP”)
The Company continues to evaluate the incorporation of a WWTP for the Darwin TIVAN® Processing Facility (“DPF”)as part of optimisation work on the Mount Peake Project in relation to options for reducing water demand, processing water discharge and overall operational expenditures for the DPF.
The WWTP works have been running in parallel to the FEED study and non-process infrastructure works. The preliminary design and engineering works completed to date have confirmed the technical viability of the WWTP
for the DPF.
The Company is including the WWTP into the Project design and development, as well as into the EIS Supplement submission and engineering, procurement, and construction (“EPC”) structure.
Northern Territory Government
Land Site – Darwin TIVAN® Processing Facility
Following the Northern Territory election in late August 2020 and the subsequent major changes in the NTG structure implemented during September 2020, the Company sought to engage with the new Departments to progress the land sale negotiations.
The Company plans to meet with the new NTG representatives in early February to seek the finalisation of the terms of the direct sale of the DPF land site.
Project Permitting
Darwin TIVAN® Processing Facility Environmental Impact Statement
During the quarter, the Company completed all additional works required to address all of the additional matters for the Supplement to TNG’s Draft EIS received from the Northern Territory Environment Protection Authority (“NT
EPA”).
Reporting of all additional works is currently being finalised for inclusion in the Supplement, which is on target to be submitted by the end of January.
A virtual meeting with the NT EPA Board and TNG representatives was held in early December 2020 to present an overview of the studies undertaken and solutions proposed by the Company for the matters raised.
Mining Management Plan
In November 2020, the Company submitted a Revised MMP for the Mount Peake Mine Site ahead of schedule to the Department of Industry, Tourism and Trade of the NTG.
The Revised MMP follows the response to all key matters raised by the NTG on the Initial MMP submitted in late 2019 (see ASX Announcement dated 8 October 2019).
Off-Take Agreements
Vanadium Pentoxide
In October 2020, the Company executed a binding life-of-mine off-take and marketing agreement (“Agreement”) with global commodity trader Gunvor (Singapore) for 40% of the 6,000 tonnes per annum of high-purity vanadium
pentoxide that is intended to be produced by the Mount Peake Project.
Under the Agreement, Gunvor will purchase vanadium pentoxide on an FOB basis, for global marketing and distribution for a fixed discount.
The Company already has a binding life-of-mine off-take agreement in place with Woojin (Korea) for 60% of TNG’s forecast vanadium pentoxide production.
Titanium Dioxide Pigment
The Company has a binding life-of-mine off-take and marketing agreement in place with market expansion provider DKSH (Switzerland) for a minimum of 75,000 tonnes and up to 100% of TNG’s titanium dioxide production on an FOB basis.
The Company has a binding life-of-mine off-take agreement in place with the Vimson Group for 100% of the DPF’s planned production of 500,000 tonnes per annum of high-grade iron ore fines (+64% Fe) on an FOB basis for global
marketing and distribution, for a fixed commission.
Vanadium Redox Flow Battery (“VRFB”) Business Unit
In November 2020, the Company announced that it had established a VRFB business unit via its green energy focused 100%-owned subsidiary, TNG Energy Pty Ltd, as part of its vertical integration strategy for the Mount Peake Project.
The launch of this new business unit marks a further important growth and diversification step for the Company into the rapidly growing green energy sector, complementing other recently unveiled initiatives including its
strategic partnership with SMS group to develop a CO2-neutral technology for green hydrogen production.
The Company subsequently announced the appointment of Australian renewable energy companies Generators and Off-Grid Energy to provide business development advice and juwi Renewable Energy to provide specialist
technical advice.
TNG’s aim is to produce its own vanadium electrolyte and become a commercial supplier of VRFB’s targeting greenhouse emission reductions, providing an economic alternative to conventional power generation for standalone off-grid power systems. The Company is currently advancing discussions with several VRFB suppliers.
Importantly, the production of vanadium electrolyte will not affect the off-take agreements in place with Woojin (Korea) and Gunvor (Singapore) for TNG’s forecast vanadium pentoxide production.
Equity
The Company has continued evaluating different options for equity financing during the quarter. However, the final equity requirement will be determined following completion of the FEED study and receipt of the final EPC proposal.
OTHER PROJECTS
Kulgera Project (EL – 100% TNG)
The Company has Exploration Licences in place for the Kulgera Project, a 1,231km2 vanadium and titanium exploration project located along the South Australian border in the Northern Territory.
Future planned work programs at Kulgera will be focused on defining sources of concentrate that could be treated using TNG’s TIVAN® Process and conducting concentrate flowsheet refinement and TIVAN® testwork to determine the economics of extraction which could enhance the Mount Peake Project.
Moonlight Project (ELA – 100% TNG)
The Company has submitted Exploration Licence Applications for a vanadium exploration project at Moonlight, located 80km west of Daly Waters in the central Northern Territory. The project tenure has already been advertised
by the Northern Territory Government and is now progressing through the normal grant process.
Cawse Extended Mine Project: Nickel-Cobalt (80%: Mesmeric/20%: TNG)
The Company has a 20% free-carried interest in the Cawse Extended Mining Lease. No information was supplied by Mesmeric Enterprises during the reporting period. The Company continues to request an update.
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