Australian strategic metals company TNG Limited (ASX: TNG) is pleased to announce that is has signed a Binding Life-of-Mine Off-take and Marketing Agreement (Agreement) with the leading Market Expansion Services provider DKSH to purchase, on a life-of-mine basis, up to 100% of the titanium dioxide (TiO2) pigment that will be produced by its flagship 100%-owned Mount Peake Vanadium-Titanium-Iron Project in the Northern Territory.
The signing of this pivotal Agreement with a highly respected multi-billion dollar group which is a leader in its field, particularly across the Asian region, follows the Binding Term Sheet with DKSH announced last year, under which the parties agreed key terms for the off-take.
DKSH is a publicly-listed (SWX: DKSH) leading Market Expansion Services provider. Headquartered in Zurich and with a history dating back over 150 years, DKSH is deeply rooted in communities all across the Asia-Pacific region. The company offers any combination of sourcing, marketing, sales, distribution and after-sales-services and is organized into four Business Units: Consumer Goods, Healthcare, Performance Materials and Technology. Its core business is supporting other companies to grow their business in new or existing markets.
With 825 business locations in 35 countries and 33,000 specialized staff, it is one of the top-25 Swiss companies ranked by sales and employees. In 2018, DKSH generated annual net sales above US$11 billion.
The Agreement encompasses the titanium dioxide (TiO2) pigment products that will be produced by TNG's proprietary TIVAN hydrometallurgical process, incorporating an innovative new process announced last year.
The breakthrough process, which is based on the conventional TiO2 sulphate route, followed extensive technical work undertaken by TNG and its partners over the past two years.
The TIVAN titanium feedstock's low iron content is a significant advantage over standard TiO2 feedstocks. Lowiron feedstock has the potential to minimise the environmental impact compared to a standard sulphate titanium pigment production process - an important competitive and strategic advantage for TNG.
This recent technical breakthrough has the potential to further improve TNG's TiO2 product quality, price and the overall economics of Mount Peake while at the same time reducing the technical complexity and environmental impact of the Project.
Together with the binding agreements already in place for its vanadium and iron products, the signing of this Agreement with DKSH marks another important step in TNG's commercial strategy for the Mount Peake Project and paves the way for project financing to proceed.
Commenting on the signing of a Binding Term Sheet with DKSH, TNG's Managing Director & CEO, Mr Paul Burton, said: 'This is a really exciting milestone for TNG and marks the formalisation of our strong relationship with DKSH, one of the world's leading Market Expansion Services providers. We have now converted the previously announced Binding Term Sheet with DKSH into a binding off-take agreement within the timeframe that we set - which is a great achievement for TNG, our shareholders and the Mount Peake Project.
'DKSH is a great fit for us given the technological breakthrough we achieved last year with our ability to produce titanium dioxide pigments. We are really looking forward to working closely with them as we complete the funding package for Mount Peake and move the Project towards development and construction.
'With our final environmental assessment and permitting milestones also making strong progress, as announced last week, the completion of this binding off-take agreement will add significant momentum to our funding and commercialisation strategy for Mount Peake. We are also working on signing final binding off-take agreements in the coming months for both our vanadium pentoxide and iron products. Together with the Front End Engineering and Design work currently underway, these agreements will effectively underwrite our funding strategy for Mount Peake.'
Commenting on the signing of a Binding Term Sheet with TNG, Dr. Natale Capri, Co-Head Business Unit Performance Materials, DKSH, said: 'Today's signing of the binding off-take agreement is another milestone in our future cooperation with TNG. DKSH has a track record in the distribution of TiO2 and future sales from Mount Peake are synergic with the existing product offering addressed to the same customer base. DKSH's customers worldwide will benefit from a reliable and steady supply of high-quality products.'
TNG updated the economics of its Definitive Feasibility Study (DFS) for the Mount Peake Project in November 2017, confirming a world-class project capable of generating outstanding returns (ASX Release, 20 November 2017). The recent technical breakthrough should further improve the economics of TNG's Mount Peake project while at the same time reducing some technical complexity and environmental impact. Key findings of the updated DFS included life-of-mine net cash flow of $11.7 billion, a pre-tax IRR of 44% and an NPV8 of $4.7 billion.
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TNG is building a world-scale strategic metals business based on its flagship 100%-owned Mount Peake Vanadium-TitaniumIron Project in the Northern Territory. Located 235km north of Alice Springs, Mount Peake will be a long-life project producing a suite of high-quality, high-purity strategic metals products for global markets including vanadium pentoxide, titanium dioxide and pig iron. The project, which will be a top-10 global producer, has received Major Project Facilitation status from the NT Government. Vanadium is a highly strategic metal which is used as an alloy in steel. It is also in strong demand for use in energy storage, with vanadium redox batteries used to store electricity generated by solar and wind power, and lithium-vanadium ion batteries used to power hybrid cars.
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