TNG LIMITED September 2020 Quarterly Activities Report
SUMMARY
• Life-of-Mine Off-take Agreement executed with Vimson Group for 100% of the high-purity iron ore products to
be produced by Mount Peake.
• Life-of-Mine Off-take and Marketing Agreement executed with major global commodity trader Gunvor
(Singapore) for 40% of the vanadium pentoxide to be produced by Mount Peake.
• Key work streams within the comprehensive Front-End Engineering and Design (“FEED”) study for the Mount
Peake Project continued to be advanced during the quarter.
• Supporting FEED work streams that had been deferred due to the COVID-19 crisis recommenced as restrictions
have been eased in heavily affected locations, mainly in Europe.
• Pre-qualification tender of the majority of non-process infrastructure (“NPI”) work streams completed, with
contractors short-listed.
• Issue of an Authority Certificate for the mine site of the Mount Peake Project by the Aboriginal Areas Protection
Authority.
• Preparation of the Supplement to the Draft Environmental Impact Statement (“EIS”) for the Company’s Darwin
TIVAN® Processing Facility (“DPF”) advanced during the quarter.
• Specialist consultant engaged to progress waste material characterisation works required for completion of the
EIS Supplement.
• Commencement of an updated Mining Management Plan for the Mount Peake Mine Site to address matters
raised by the Northern Territory Department of Primary Industry and Resources.
• Strategic partner development agreement executed between TNG and German based SMS group for
development of carbon-neutral hydrogen technology to be applied to the TIVAN® Process.
CORPORATE
• KPMG Corporate Finance project finance team appointed as global financial advisor to assist TNG in securing
total project finance for the development of the Mount Peake Project.
• Continued engagement on the project financing structure with KfW IPEX-Bank (“KfW”), with the Northern
Australia Infrastructure Facility (“NAIF”) regarding their funding process and with potential equity funders.
• The Company’s cash position at 30 September 2020 was $3.7 million.
• The Company is currently undertaking a 1-for-9 non-renounceable pro-rata entitlement issue to raise up to
$12.5 million to progress the Mount Peake Project towards a Final Investment Decision.
COVID-19
During the September Quarter, the Company returned to normalised working hours and arrangements for its
project management team and other staff with the provision of flexible working arrangements when required.
All necessary health and safety precautions are being taken as part of this process of returning to the office.
The Company continues to monitor the global situation with respect to any potential impact on its current work.
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 (“FEED”) Study
During the quarter, TNG and its strategic engineering and development partner, the German-based metallurgical
engineering firm SMS group (“SMS”), have continued to progress the key work streams within the comprehensive
FEED study for the Mount Peake processing plants related to design and engineering.
Good progress was achieved in all areas of the FEED study, including:
• Completion of FEED Process & Instrumental Diagrams;
• Completion of FEED Process Flow Diagrams (PFDs);
• Advanced development of 3D model for the Darwin TIVAN® Processing Plant (“DPF”);
• Advanced development of Major Equipment List;
• Plant Optimisation;
• Continued development of delivery of EPC delivery model;
• Development of clean energy options for the DPF; and
• Ongoing European laboratories confirmatory testwork.
Non-Process Infrastructure (“NPI”)
In parallel with the FEED study, the Company has completed the tender process and short-listed service providers
for the NPI works required at both the Darwin TIVAN® Processing Facility and the mine site Beneficiation Plant,
which includes haul roads, bore fields, accommodation camp, logistics infrastructure and power supply.
Mining
During the quarter, the Company completed an owner-operator study for mine, load and haul of ore and waste,
ROM crusher feed and process plant waste removal, in addition to the tender process for the provision of mining
services undertook during the June 2020 quarter.
Northern Territory Government
Land Site – Darwin TIVAN® Processing Facility
During the quarter, the Company progressed discussions with the Department of Infrastructure, Planning and
Logistics of the Northern Territory Government for TNG’s direct sale application for the DPF land site.
The land offered to TNG for the DPF is currently Crown Land and is a large disturbed site of approximately 150 acres
in Darwin. The land, which is located just 10km from the Darwin Port, had previously been used for building material
extraction, is zoned for heavy industry, and is ideally located next to the railway line, the Amadeus Gas pipeline hub
and the Darwin power plants.
Project Permitting
Aboriginal Areas Protection Authority (“AAPA”) Certificate for Mount Peake Mine Site
During the quarter the Company has been granted an Authority Certificate (“Certificate”) for the mine site area by
the AAPA.
The issue of the AAPA Certificate is a key permit the Company required before any on ground commencement of
mining operations for the Mount Peake Project.
Darwin TIVAN® Processing Facility Environmental Impact Statement
During the quarter, the Company – with assistance from its environmental advisors, Animal Plant Mineral (“APM”)
– continued to progress a number of work streams to address all of the additional matters raised in the direction
to prepare a Supplement to TNG’s Draft EIS received from the Northern Territory Environment Protection Authority
(“NT EPA”).
Additional ground-based surveys required to address matters related to marine flora and fauna, noise and inland
water quality were undertaken during the quarter, following the reopening of the Northern Territory border.
The Company also engaged Environmental Geochemistry International Pty Ltd (“EGi”) to undertake a detailed
characterisation study and risk assessment for the waste products that will be generated at the DPF for inclusion in
the Supplement.
Mining Management Plan (“MMP”)
The Company is currently preparing the responses to the comments received from the Department of Primary
Industry and Resources of the Northern Territory Government on the MMP for the Mount Peake Mine Site.
Off-Take Agreements
Iron Ore
In July 2020, the Company signed a binding life-of-mine off-take agreement 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 a FOB basis for
global marketing and distribution, for a fixed commission.
Vanadium Pentoxide
Subsequent to the end of the quarter, 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 FOB, 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.
Hydrogen Production Technology
In September, the Company announced that it had entered into a strategic partner agreement with SMS group to
develop a CO2-neutral technology for the production of green hydrogen from various renewable, secondary or
fossil hydrocarbon sources by means of plasma pyrolysis, utilising green electrical energy.
This technology, which consumes roughly one-third of the electricity required to produce the same amount of
hydrogen by electrolysis of water, could be the preferred reduction agent for TNG’s TIVAN® Process, marking an
important step in the Company’s roadmap towards achieving a net zero carbon footprint for TIVAN®.
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Project Finance
During the quarter, TNG appointed KPMG Corporate Finance as its global financial advisor for the Mount Peake
Project to assist the Company to optimise and execute the debt and equity components for the total project
financing requirements for Mount Peake development and operations.
KPMG Corporate Finance has a dedicated mining corporate finance team that assists with global-scale projects like
Mount Peake and has recent experience working on other large project financing deals with KfW IPEX-Bank GmbH
(“KfW”), the Northern Australia Infrastructure Facility (“NAIF”) and export credit agencies.
Bank Finance
During the quarter, the Company held virtual meetings with its exclusive senior debt advisor and arranger, KfW, to
advance discussions regarding project financing.
The Company has continued discussions with NAIF regarding their funding process, following the prior submission
of a detailed proposal to NAIF.
Equity
The Company has continued evaluating different options for equity financing during the quarter. However, the final
equity requirement will only be determined following completion of the FEED study and confirmation of the level
of debt funding available.
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