Post DFS Price, page-63

Article still suggesting TNG need to give up 60% which PB siad ain't gunna happen!! SP been capped by financier IMO

http://resourcesrisingstars.com.au/

TNG: 19c vanadium-titanium stock tipped to hit 97c on Mount Peake financing deal, says top analyst

'Emerging vanadium and titanium producer TNG Limited (ASX: TNG) has been valued at 97c a share – nearly five times its current share price – by a top Sydney resource analyst.
The eye-catching “base case indicative valuation” comes in the wake of the highly successful Definitive Feasibility Study on TNG’s flagship Mount Peake vanadium-titanium-iron project in the Northern Territory which attributed a Net Present Value of A$4.9 billion to the project.
The report, by Sydney-based Breakaway Research, is based on a cash flow model from Mount Peake and a valuation for TNG “based on a conceptual funding scenario”.
The DFS forecasts that the $970 million project will generate $13.6 billion in surplus operating cash flow over its initial 17-year life – $780 million a year – delivering an Internal Rate of Return of 41 per cent; rating it as one of the best resource projects in Australia.
Located north of Alice Springs, Mount Peake is one of the largest new resource projects currently being proposed anywhere in Australia – and is set to become a major global supplier of premium grade vanadium, as well as high-purity titanium pigment and pig-iron products.
Breakaway research analyst Mark Gordon’s model of the Mount Peake Project values it at a conservative A$2.9 billion.
This result is based on a valuation model which assumes a conceptual financing structure whereby TNG would sell a 60 per cent equity stake in the project to a cornerstone partner (likely to be one of the large South Korean industrial conglomerates with which it has MOU’s in place).
“Under this scenario, TNG retains a 40 per cent free-carried interest in Mount Peake, with distributions commencing once the partner has recouped capital from cash flow,” Gordon says.
“My model assumes and includes an upfront payment of $156 million to TNG for the sale of a 60 per cent equity stake in the current 160Mt resource. This is based on a selling price of 10 per cent of the project NPV per tonne of resource. This results in a conservative valuation of 97c / share.”
Gordon continues:  “We note this is significantly higher than our previous valuation, however this is due to a number of factors, including higher expected revenues, lower Australian Dollar and a higher risk multiple (50 per cent vs. 40 per cent) for the project to reflect ongoing de-risking.
“It has to be noted that the value ascribed by us to TNG for Mount Peake is conceptual. There are plenty of other financing options the company is looking at and our valuation is dependent upon an off-take/equity partner signing up, and the terms of any agreement.”
Gordon says TNG has met all critical milestones in the past four months, including successful pilot plant testwork to commercialise its patented TIVAN hydrometallurgical process.
“The final risk now is securing finance,” Gordon said. “Actions by the company in the signing of agreements with a number of potential partners in all three of the main product lines has gone a significant way to mitigating this risk and has formed the basis for current negotiations, including looking at various means of project financing and development in addition to securing off-take.”
TNG chief Paul Burton told the Resources Rising Stars luncheon series last week week that he was “confident” of securing binding funding and off-take agreements which would pave the way for development of the $970 million project to proceed.
“We’ve met all of our milestones so far and, to be honest, I can’t see that changing over the coming few months,” he said.
Burton told investors he was about to embark on an series of overseas trips to meet with potential off-takers, cornerstone investors and financiers as well as a group of US private equity groups that had expressed “keen interest” in funding the project.
With the prospect of a massive value uplift following a successful outcome at these meetings, investors will be keenly tracking his progress around the globe.
TNG is aiming to finalise off-take and funding arrangements over the next few months, clearing the way for construction to begin next year. First production is slated for 2018.'