breaks 5c, page-18

BARRY FITZGERALD |
The Australian |
March 18, 2014 12:00AM



TNG Limited (TNG)

PERTH-BASED TNG has been duck-like of late, seemingly motionless on the pond but paddling furiously beneath the water to keep its Mount Peake vanadium-titanium-iron project in the Northern Territory on a development timeline.

The rewards for all that paddling are expected to take shape this year, not that the group’s current share price of 4.5c for a market cap of $25m is saying that is the case just yet.

Last year TNG flagged that its definitive feasibility study into a development would be reviewing and optimising the 2012 pre-feasibility study results, with the expectation that it won’t be long now before the market hears about reductions in capital and operating expenditure expectations, the possible introduction of project-offtake partner(s) to help deal with the funding needs, and perhaps the move of the downstream processing plant to a lower cost environment, which is another way of saying not in Australia.

It has to be said that vanadium in this market is presently on the nose because of the debt and fire-damage woes of Atlantic’s Windimurra project in WA. But Mount Peake’s planned use of its TIVAN hydrometallurgical treatment process, and its co-product production of titanium dioxide and iron, makes it a very different beast. If anything, Mount Peake’s main challenge will be finding a home for its planned vanadium as it represents a big chunk of current global production of the stuff.

The good news there is that China has mandated the use of better quality steels in its construction industry, which is where 90 per cent of demand for vanadium ends up. Then there is the buzz building around vanadium redox batteries, which are actually more like six-storey apartment blocks that Japan and others are backing home as the answer to provide the grid-sized storage capability needed to offset the variability from wind power when it ain’t blowing, and solar power when the sun ain’t shining.

For what it is worth, some sponsored analyst research has just been posted on TNG’s website. It arrives at a 28c share valuation for the company, based on it being free-carried with a 40 per cent interest in Mount Peake.

http://www.theaustralian.com.au/business/opinion/bridging-golds-disconnect/story-fnciil7d-1226857313856#mm-premium