TIVAN LIMITED ASX ANNOUNCEMENT
25 January 2022
December 2021 Quarterly Activities Report
Australian engineering and construction company Clough appointed to help advance the integrated mining and processing layout for Mount Peake, with a new plant layout completed in November |
only | Project financing advancing on multiple fronts | $12.5 million raised via share placement |
SUMMARY | |
MOUNT PEAKE PROJECT - VANADIUM-TITANIUM-IRON (NT) (TNG: 100%) |
• Clough Projects Australia Pty Ltd ("Clough") appointed to develop an integrated design layout ("Integrated
Layout") for the single mining and processing operation at the Mount Peake Project mine site ("Mine Site"),
located 235km north-west of Alice Springs in the Northern Territory.
• In November, Clough, together with TNG's Project Team, completed development of the Integrated Layout | |
use | comprising the beneficiation plant, TIVAN® processing facility and plant utilities located within the Mining |
Lease footprint of the Mine Site. | |
• Following the successful completion of the Integrated Layout, Clough was then commissioned to progress | |
personal | value engineering to optimise outcomes in cost/schedule and progress design aspects incorporating, civil, |
structural & architectural, mechanical, piping, electrical & instrumentation engineering disciplines, logistics | |
and non-process infrastructure. | |
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•
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TNG GREEN ENERGY STRATEGY
• TNG and its green energy partner, AGV Energy & Technology, continued to advance scoping and evaluation
of a HySustain Green Hydrogen Project in Darwin. | |
For | |
• | TNG's consultant, METS Engineering, progressed the technology and process design study for a vanadium |
electrolyte production facility for the Company's vanadium redox flow battery business unit.
CORPORATE
• In November, TNG raised A$12.5 million in an oversubscribed institutional share placement at A$0.09 per share ("Share Placement") to fund the further consolidation planning, engineering and approvals and project financing work streams for the Mount Peake Project, as well as to progress the Company's green energy initiatives.
• The Company's cash position at 31 December 2021 was $16.3 million.
ASX CODE: TNG | REGISTERED OFFICE | T +61 8 9327 0900 | W www.tngltd.com.au |
ABN 12 000 817 023 | Suite 20, 22 Railway Road | F +61 8 9327 0901 | E corporate@tngltd.com.au |
Subiaco, Western Australia 6008 | |||
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, including Government-enforced travel restrictions.
only | 2 |
The Company | is closely monitoring the COVID-19 situation domestically and globally, including restrictions |
implemented by governments in Australia, mainly in Western Australia, and internationally, primarily in Germany and Austria, due to the Omicron variant and for any potential impacts on the Mount Peake Project.
The Company is currently assessing any potential impacts on the Project arising from the Western Australian Government's recent announcement maintaining the closure of the Western Australia borders indefinitely and their management of the COVID-19 pandemic1.
Notably, the Association of Mining and Exploration Companies (AMEC) has issued a media release expressing various concerns on the major difficulties created by the hard border for companies, including challenges to
usecompanies that have operations and interests outside of Western Australia, like TNG.
MOUNT PEAKE PROJECT - VANADIUM-TITANIUM-IRON (TNG: 100%)
PROJECT SUMMARY AND DETAILS
The Mount Peake Project ("Mount Peake Project" or "Project") is the Company's flagship project comprising a world-scale strategic metals deposit located 235km north-west of Alice Springs together with its advanced downstream processing under its 100% owned TIVAN® process. The Project is well located close to existing key
power and transport infrastructure including the Alice Springs-Darwin Railway and the Stuart Highway. personalMount Peake is a shallow, flat-lying orebody with a JORC Measured, Indicated and Inferred Resource totalling 160
million tonnes (118 million tonnes Measured, 20 million tonnes Indicated and 22 million tonnes Inferred), grading 0.28% V2O5, 5.3% TiO2 and 23% Fe (refer to Appendix A of this report for a full statement of the Mount Peake Mineral Resource). The Mount Peake Project is one of the largest undeveloped vanadium-titanium-iron projects in the world.
The Project has been awarded Major Project Status from both the Australian Federal Government and the Northern Territory Government.
The Company's strategy for the Mount Peake Project is to develop a fully-integrated single mining and processing operation to produce three high-value,high-purity products for export - vanadium pentoxide (V2O5), titanium dioxide pigment (TiO2) and iron oxide (Fe2O3) - through the application of a world-first processing technology, known as the TIVAN® Process, which is owned exclusively by TNG.
TNG has life-of-mine binding off-take agreements in place for 100% of all products proposed to be produced from the Mount Peake Project with strong off-take counterparties with a multi-national presence.
For
Figure 1. Mount Peake Project Location Plan in the Northern Territory
- https://www.wa.gov.au/government/announcements/was-updated-safe-transition-plan-5-february-2022
- AMEC Media Release - "Delay means WA must address challenges created by the Hard Border now"
2
PROJECT DEVELOPMENT
Integrated Layout
In October 20213, the Company announced that it had appointed Clough to work with TNG's Project Team and SMS group ("SMS") to develop an integrated layout for the Mount Peake Project. This appointment followed a strategic decision to progress a fully-integrated operation at the Mount Peake mine site4 and was made in light of the severe onlyrestrictions on travel between Europe and Australia due to the COVID-19 pandemic which have impacted SMS'
ability to travel and fully assign a team in Australia.
The preliminary integrated layout was developed and delivered by Clough together with TNG's Project Team in November 20215, based on the deliverables prepared under the Front-End Engineering and Design ("FEED") study completed by SMS. The integrated layout comprises the beneficiation plant, TIVAN® processing facility ("TPF") and plant utilities located within the Mining Lease footprint of the Mount Peake site.
The plants will be positioned adjacent to the western boundary of the designated mining areas within the Company's existing Mining Lease 29855, which covers an area of 1,460 hectares. This area is capable of hosting a usefully-integrated operation encompassing mining activities and waste storage, the Beneficiation Plant, the TPF and
non-process infrastructure.
The integrated layout will be unconstrained compared to the size and shape requirements at the former Darwin ite. This offers the potential to capitalise on improving constructability, operability and maintenance for the Project, as well as further cost optimisations from integrated infrastructure.
Value Engineering and Technical Optimisations
Following the delivery of the preliminary integrated layout for the Project, TNG commissioned Clough to progress personalvalue engineering to optimise outcomes in cost/schedule and progress design aspects incorporating civil, structural & architectural, mechanical, piping, electrical & instrumentation engineering disciplines, logistics and non-process
infrastructure.
Clough has been working with TNG's Project Team with support from SMS to undertake this next engineering and design stage and deliver an updated capital cost estimate for the development of the Mount Peake Project, with this stage expected to be completed in May 2022.
Front-End Engineering and Design ("FEED") Study
TNG's Project Team has completed a review of the updated FEED report prepared and delivered by SMS, with further amendments requested by TNG's Project Team being currently addressed by SMS.
Additionally, the Company's Project Team is working with SMS and Clough to incorporate any changes on the ngineering and design of the TPF as a result of the integrated Project at the Mine Site.
Non-Process Infrastructure ("NPI")
The Company has progressed updates on the NPI requirements for the integration and consolidation of the Project at the Mine Site.
ForPROJECT EXECUTION MODEL
TNG and SMS continued revision and optimisation of the model for the delivery of the Mount Peake Project during the quarter due to ongoing commercial and logistical challenges caused by the global COVID-19 pandemic, including severe restrictions on travel between Europe and Australia, the escalation of construction and engineering costs, global workforce shortages and disruptions to supply chain logistics.
PERMITTING AND APPROVALS
Environmental Approvals
TNG's environmental consultant, Animal Plant Mineral ("APM"), has continued to liaise with the Northern Territory Environment Protection Authority ("NT EPA") to progress the environmental assessment for the integrated Project.
- Refer to ASX Announcement of 7 October 2021, "TNG appoints Clough for integrated layout of Mount Peake".
- Refer to ASX Announcement of 7 October 2021, "TNG Announces Strategic Change for the Mount Peake Project".
- Refer to ASX Announcement of 23 November 2021, "New plant layout for Mount Peake completed by Clough".
3
The Company and APM prepared and submitted a draft scope of works to the NT EPA during the Quarter and commenced review/updates of several technical studies
Mount Peake Mining Management Plan ("MMP")
The Company continues to liaise with the Department of Industry, Tourism and Trade of the Northern Territory Government on any further requirements for the MMP due to the consolidation of the Project.
onlyNative Title Agreement
TNG representatives progressed discussions with the Central Land Council ("CLC") representatives regarding the consolidation of the Mount Peake Project at the Mine Site and future engagements with the native title holders.
An Indigenous Land Use Agreement is in place between TNG, the CLC and the Eynewantheyne Aboriginal Corporation RNTBC ICN 7947 (Native Title Party) ("Agreement")6. This Agreement was supplemented by an Authority Certificate issued under the NT's sacred sites legislation7.
PROJECT FINANCE
useDebt Finance
KfW IPEX-Bank & KPMG Corporate Finance
In December, TNG agreed with KfW IPEX-Bank to extend the term of the debt financing mandate for 12 months to December 2022, following delays caused by the COVID-19 pandemic and the Company's strategic decision to progress a fully-integrated operation at the Mount Peake Mine Site.
The KPMG Corporate Finance team continued to provide advice to assist TNG on the execution of the debt funding
process, including due diligence processes, and is working closely with KfW IPEX-Bank in this regard. personalGovernmental Concessional Funding
During the quarter, TNG commenced engaging with Export Finance Australia ("EFA"), which is the Government body charged with administering the Critical Minerals Loan Facility, on opportunities to access this funding facility. As part of this process, the Company also continued liaising with the Federal Government Major Project Facilitation Office, the Federal Government Critical Minerals Facilitation Office and the Northern Territory Major Projects team.
TNG also continued to liaise with the Northern Australia Infrastructure Facility (NAIF) to progress the Company's funding application, having provided updated information on the Project as a result of the fully-integrated Mount Peake operation.
Build-own-operate-transfer funding
As part of the Company's funding strategy defined under previous feasibility studies, TNG continues to evaluate a number of BOOT or Build-Own-Operate ("BOO") funding mechanisms in addition to the upfront pre-development capital expenditure required for Project development.
During the period, the Company engaged with potential BOOT/BOO providers across the Project's process and non- process infrastructure. KPMG Corporate Finance has been assisting TNG through the provision of advice on
Forpotential structuring and commercial requirements for such arrangements.
Sustainable lending opportunities
The Company is working with its advisors and sustainability consultants to assist in ensuring that the full range of Environmental, Social and Governance ("ESG") funding options are assessed and prioritised, and that traditional lenders are able to ascribe in their lending terms the full value of the ESG benefits that the Mount Peake Project will deliver.
Given the involvement of Export Credit Agencies and Equator Principles Financial Institutions, the project financing will align to World Bank guidelines, Equator Principles and the International Finance Corporation's performance standards. A detailed Environmental and Social review will be undertaken as part of the project financing process.
- Refer to ASX Announcement of 11 October 2018, "Mount Peake Native Title Agreement Executed".
- Refer to ASX Announcement of 12 October 2020, "Authority Certificate issued for Mount Peake".
4
Equity
During the period, the Company with the assistance of KPMG Corporate Finance progressed its strategy for the equity financing for the Mount Peake Project, including both institutional investor and strategic equity streams.
TNG continues to increase the institutional presence on its share register to support a future project financing equity raising, as reinforced by the recent Share Placement.
onlyTitanium Dioxide Pigment - TiO2
PRODUCT PRICING DEVELOPMENT8
Titanium dioxide pigment demand remained strong in 2021. The utilisation of existing plant capacity was very high (above 95%) and the current inventories are very low (below 30 days).
The price of TiO2 has increased in all regions in the last 12 months, up 35.82% in China, 22.3% in APAC (excluding China), 12.7% in Europe and 9.5% in North America.
Persistent constraints on feedstock will continue and are expected to increase in 2022. Feedstock prices have useincreased in the last 12 month, with ilmenite from China going up 58.3% and rutile from Australia up 18.6%.
The market price is expected to continue its momentum in 2022 and beyond due to strong paint demand in housing, the depletion of large feedstock deposits and the temporary shutdowns at some pigment plants during the year due to operational and supplier issues. Analysts expects these trends to continue at least until 2023-24.
TNG expects to achieve a 3-5% premium on the market price as its product will be a high-durable pigment.
ersonalp | Ti | Pricing | Ti | vs Feedstock | ||||||||||||||||||||||||||||||||||||||||||||||||
ICIS | Fastmarkets | |||||||||||||||||||||||||||||||||||||||||||||||||||
ICIS Fastmarkets | ||||||||||||||||||||||||||||||||||||||||||||||||||||
4,800 | 4, | 00 | 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
4,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
4, | 00 | 2,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
,700 | mt) | |||||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
,400 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
,800 | Feedstock( S mt) | |||||||||||||||||||||||||||||||||||||||||||||||||||
,500 | NorthAmerica ( S | |||||||||||||||||||||||||||||||||||||||||||||||||||
S mt | ,100 | mt | 1,500 | |||||||||||||||||||||||||||||||||||||||||||||||||
, | 00 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2,800 | ,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2,800 | 1,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2,500 | 2,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2, | 00 | 2,200 | 1,000 | 2,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
1,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
1,800 | 1,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||
1, | 00 | 1, | 00 | 500 | 1,000 | Ti | ||||||||||||||||||||||||||||||||||||||||||||||
1 | 10 | 1 | 11 | 1 | 12 | 1 | 1 | 1 | 14 | 1 | 15 | 1 | 16 | 1 | 17 | 1 | 18 | 1 | 19 | 1 | 20 | 1 | 21 | 500 | ||||||||||||||||||||||||||||
North America, DDP ( | mt) | China, F | ( | mt) | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
Asia, CF | ( | mt) | Europe, DDP ( | mt) | 1 | 12 | 1 | 1 | 1 | 14 | 1 | 15 | 1 | 16 | 1 | 17 | 1 | 18 | 1 | 19 | 1 | 20 | 1 | 21 | ||||||||||||||||||||||||||||
TNG Est. Cost of Produc | on ( | mt) | Ilmenite China | u | le Australia | u le China | Ti | North America |
Vanadium Pentoxide - V2O5
The price of vanadium pentoxide (98%), in-warehouse Rotterdam, increased by 65.4% in the last 12 months, reaching US$9.00/lb at the end of 2021, while the V2O5 (98%), FOB China, price rose 39.2% over the same period, closing 2021 year at US$8.92/lb.
The ferrovanadium price, FOB China, increased 35.8% from the same period last year, reaching US$38.81/kg.
ForRoskill expects a long-term V2O5 price of US$7.50 /lb and 2% CAGR growth in demand between 2021 and 2050, reaching 209kt at the end of the period.
TNG expects to achieve a US$2.0/lb V2O5 premium on the market price for its product at 99.6% purity (Roskill - September 2020).
8 Pricing source: ICIS and Fastmarkets
5
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TNG Limited published this content on 25 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 January 2022 01:16:01 UTC.
