Approvals Progress

Long time HC reader and shareholder (well a bit over 2 years anyway), first time poster on TNG.

I should start by saying I believe that Mt Peake/TIVAN is a great project and i'm planning on being a long-term holder and my intention isn't to downramp BUT I have had some concerns for a while now about the TNGs overall approvals progress, particularly in light of the history of overly optimistic timeframes from management.

We are being given regular updates on the Mt Peake EIS progress and i'm not too concerned by the requests for supplementary info etc (i once worked on a resources development project where there was an addendum to the addendum to the supplementary EIS). What does concern me is the lack of updates provided for the refinery approvals. A lot of emphasis seems to be placed on the Mt Peake approval to get the project moving but I think think that is largely irrelevant if the refinery approvals are lagging behind which they appear to be. I think it's unlikely that FID will be given for any part of a ~$1BN project (or even finance being approved) until the refinery EIS is significantly advanced/if not approved. No FID would mean no commencement of 'breaking ground' at Mt Peake once the mine EIS is completed (unless they approve and can get funding for an early works package prior to FID - access roads, construction camps, borefield, water pipeline etc). So basically everything will be hanging off the refinery EIS.

The communication about the refinery EIS has been pretty much non-existent, no mention of it in the Mar 2017 QAR, yet the Mar 2016 QAR stated: 'The Refinery EIS is scheduled to be completed in late 2016, allowing overall environmental approval to be secured by early 2017'. The most recent reference to it i can find is in a release on 21/12/16 which stated: "Work has also commenced on the EIS for the Darwin downstream processing plant site, the location for the TIVAN™ refinery, and that will progress in the early part of the New Year.”

The announcement in March regarding the Key Project Facilitation Agreement process is basically the first step in an EIS process. The KPFA streamline the approvals process by involving the relevant govt stakeholders early on and in a coordinated manner (looks similar to the coordinated project process in Qld). It does not constitute any approval or sign of favour by the Government. Any project with Major Project Status can negotiate to use this process (see https://nt.gov.au/__data/assets/pdf_file/0010/275599/major-project-status-policy-framework.pdf). The TNG statement in that announcement didn't even mention they were involved in an EIS process for the refinery yet the Chief Ministers statement at the time (which wasn't included in the announcement) included the following: 'TNG will conduct a full Environmental Impact Study for the refinery during the course of 2017 which will include stakeholder consultations'.

I have done some digging to see where exactly TNG are at in the EIS process and dug up the following:
Darwin Refinery (see https://ntepa.nt.gov.au/environmental-assessments/register/darwin-refinery):
-TNG Submitted Change to Project scope to remove refinery from original Mine EIS: Mar 15
-TNG Submitted Notice of Intent: October 2015
-TNG received Notice that Project is a Controlled Action (ie subject to Commonwealth EPBC Act): Jan 2016
-NTEPA released Terms of Reference for EIS: June 2016

Compare this to the dates for the Mt Peake Mine (see: https://ntepa.nt.gov.au/environment...-peake-project/environmental-impact-statement)
- TNG Submitted Notice of Intent: July 2013
- TNG received Notice that Project is a Controlled Action (ie subject to Commonwealth EPBC Act): Nov 2013
- NTEPA released Terms of Reference: March 2014
- TNG submitted EIS: Late 2015
- EIS Released for Public Comment: Feb 2016
- TNG Received Request for Additional Information: ~May 2016
- TNG Submitted Supplementary EIS: April 2017
- TNG Received Request for Additional Information: May 2017

Granted the Key Project Facilitation Agreement process may condense the timeframes somewhat as its a much smaller site (albeit in a marine environment) and the TOR don't look too onerous, but in reality it looks like there is a long way to go for the approvals process for the Refinery. Given the TOR have been available for ~12 months an EIS may well be completed this year, but the consultation, assessment and approval will likely drag well into next year. Then theres always the risk of a supplementary EIS being required if the some of the studies do not adequately assess the impacts/risks (eg the Mt Peake EIS).

I had previously given management the benefit of the doubt in regards to the frequently extending timeframes as I know from experience that pinning timeframes on the planning and approvals stage of a major project is very difficult to do but drawing inferences from the above, the chances of TNG commencing construction anytime soon don't look good - i hope im wrong but it looks like well into 2018 (assuming finance is sorted which is another story in itself - see the ATC releases for the due diligence rigor involved in the German ECA process). With a 24 month construction timeframe, that puts production well into 2020. The indicative timeframes given in the development pathway slide at the AGM in November last year look more than a little optimistic.

Thats my rant/thoughts anyway. Happy if anyone can provide feedback to show we are more advanced than I think we are.