"Sydney - Monday - July 9: (RWE Aust Business News) - TNG (TNG) has results of the pre-feasibility study for Mount Peake iron-vanadium-titanium project, Northern Territory.
The PFS outlines a very robust project capable of generating revenue of $12 billion and operating cash flows of over $5 billion over its initial 20-year life.
On the strength of these results, the board of TNG remains committed to the potential development of a substantial and financially robust strategic metals business at Mount Peake incorporating its new TIVAN hydrometallurgical process.
The pre-tax net annual cash flow is $294 million with life-of-mine revenues of $11.8bn.
The pre-tax IRR is 31.8pc with an initial 20-year life.
A 2.5Mtpa operation would expand to 5Mtpa after three years.
Average annual production of 15,300tpa vanadium, 375,000tpa titanium concentrate and 1.13Mtpa iron is envisaged.
Year 1 pre-production capital cost estimate is $339m and Year 2 $224m.
There is potential pay back in four years.
The PFS has also highlighted a number of other optimisation opportunities for the Mount Peake project.
Following recent discussions with potential Asian Engineering Procurement and Construction (EPC) companies, TNG will now give consideration to identifying potentially suitable offshore locations for the plant, which could bring both strategic and financial benefits to the Mount Peake project.
TNG will consider this option as part of any further evaluation of the project including moving to a decision on a definitive feasibility study.
Any DFS will consider all commercial options for product value adding and plant location options.
Following recent discussions with Chinese companies, the option of building a plant offshore in Asia is a potential advantage."
A shame it came out on a negative market day, otherwise it reads very well.
TNG Price at posting:
7.8¢ Sentiment: Hold Disclosure: Held
