$6.85 valuation per share becomes serious now

I believe most of long term holders know the $7.20 /share valuation by broker in March 2011.

After share issue to ECE, there will be total 402 million shares on issue, accordingly, this valuation should be amended to $ 4.50/share. However, shareholders should know there is still 300% upside potential for JORC, the $4.50/share valuation is only based on JORC140 Mt. So, after the JORC upgraded, the valuation could be well above $10.00 per share.

I tend to disbelieve this valuation before I read today?s ann, however the deal with ECE let me have to reconsider the possibility, as Paul said, the deal represented a major turning point in its corporate development , as current SP is only 1% of the broker report target.

Valuation report, See below:

Hardman & Co have produced a lengthy 28 page report on TNG. In particular they concentrate on the MT Peake project. (Refer TNG website).

http://www.tngltd.com.au/images/tngltd---xaiph.pdf

1, Who is ECE on earth?

In my book, ECE got an excellent investment check record especially on bargain hunting in Australia.

Some people mentioned ARU, not satisfied? Why? Since ECE offer 32c per share for ARU, SP soared from 29c to $1.80. this is up 500% !

No people mention NTU yet, so I will say little bit about NTU case:

On 9 August, 2010 Northern Uranium announced it had signed a binding Letter of Intent with Jiangsu Eastern China Non-Ferrous Metals Investment Holding Co., Ltd, an affiliate of East China Exploration & Development Bureau (?ECE?).
Subject to approval from Northern Uranium shareholders, ECE will invest about A$15.7m in your Company at a share subscription price of A$0.145 per share.

Although, ECE failed to get this great deal because later on LYC competed with it on the market. People should know, NTU?s SP soared from 10c (like TNG today) to $1.08 within 8 month,!

This is 900% up! What a buying target of ECE!!!
2, What can ECE bring to TNG?

a) $13.4?20 million initial cash investment. $13.4 million for Mount Peake, another $5-10 million for 80% of the McArthur Copper Project.
Here, I reckon TNG will be free carried 20% of McArthur Copper Project until a decision to mine.

As a result, TNG will have total nealy $20 million cash on hand very soon, i.e. 5c cash backing/share, plus the free carried value of McArthur Copper Project, 7c is absolutely the bottom price for TNG.

b) ECE can help TNG get bank loan from China financial market to move Mount Peake project forward into production. ECE is state owned company of China, its investment in TNG representS the Chinese government.

3, Exchange rate is not a problem any more with the soaring TIO2 price.

In the initial scope study, the TIO2 in ground value is $16 billion! TNG calculated TiO2 $2500/ t (at 92% Tio2). Now the TIO2 price soaring more than 30% to $3300 per tonne in July, see below:

http://www.indmin.com/Article/2867857/DuPont-Titanium-Technologies-raises-TiO2-prices-500-700.html

As TiO2 is the major income source, I think the 30% price increase in last 6 month has well offsetted the high AUD dollar affection.

Now TiO2 alone, the IGV has exceed $20 billion, with the JORC upgrade, could be $60 billion.

4, Do not forget TNG can sell the concentrate product as well

TNG has mentioned many times in its reports, Commercial grade concentrate produced by coarse crush and LIMS Concentrate upgrading: >1.2% V205, 18% Ti02, 55% Fe. This concentrate can be sold to China straight away after just crushing, I think this is the most Conservative & reliable way to see TNG?s SP in 30c range.

5, JORC will be doubled very soon.

It has been more than 3 month since the drilling recommenced.

All drill holes have returned consistent vanadium grades of up to 0.6% V2O5 in magnetite, which are the highest grades achieved to date from the Project, with Titanium and Iron grades maintaining consistency with previous results.
Plz note : Each hole INTERCEPT MORE THAN 100M DEPTH OF V2O5!!!

A 2,000m Reverse Circulation (RC) resource definition drilling programme is expected to commence in July, representing the final round of drilling ahead of the Mount Peake resource update. The grade and widths reported from the drilling to date are expected to provide support for an increase in both tonnes and grade in the next JORC resource upgrade for the Project.

My conclution:

People should get serious for the Total Nett Cashflow: $226M/annum, SP valuation $4.5 , after TNG announced the deal with ECE.

ECE has super excellent check record and it has done significant researches on TNG before invest $13.4 million!

With 5c cash backing per share, great project outlook, even 20c is still a no brainer buying target, like one broker said: TNG SP will break 27c very soon.

I believe the mid term target should be well above $1.00, let see what happen in next 6 month. Long term SP target $5?10/share is also possible if the TiO2 price keep soaring and the project going very well. Remember $220 million net cash flow per year means 50c earning per share, at EP 10, SP should be $5.

Cheers

Plz DYOR like ECE.