Mount Peake business case improved in updated feasibility study

JOHANNESBURG (miningweekly.com) – An updated feasibility study and financial model for the Mt Peake vanadium/titanium/iron project in the Northern Territory have lowered capital costs and improved financial parameters, setting the stage for strategic metals company TNG to move ahead and secure project funding.

The updated feasibility study, which was led and compiled by Snowden, has achieved a new preproduction capital expenditure (capex) of A$583-million, compared with the 2015 definitive feasibility study (DFS) capex of A$970-million. The decrease is primarily owing to optimisations achieved during the past 18 months, TNG reported in a statement to the ASX on Monday.

The financial model has shown an increase in the project’s pre-tax internal rate of return to 44%, up from 41%, with a moderate increase in forecast operating expenditure from A$167/t to A$185/t of ore processed. The payback period was reduced from four years to three years.

The net present value, using an 8% discount, is A$4.7-billion in the updated feasibility study compared with A$4.9-billion in the July 2015 DFS.

The updated study focused on two key areas of improvements – mine site beneficiation for concentrate production and the TIVAN process plant for extraction of commodities from the concentrate. The 2017 study is based on the production of magnetite concentrate on site at Mount Peake and assumes that concentrate will be trucked to a rail siding and then railed to the TIVAN process plant facility, located about 10 km from the Darwin port.

TNG reported that a suitable industrial zone had been identified for the proposed TIVAN process plant. Negotiations on the terms of acquisition of the land are advanced with the Northern Territory government and the environmental impact study having started.

From the concentrate, the TIVAN facility will produce high-purity vanadium pentoxide, titanium dioxide concentrate and iron-oxide. Associated downstream plants will produce high-grade titanium pigment and pig iron.

The TIVAN process plant will have a design feed capacity of 900 000 t/y of magnetite concentrate and could be expanded to 1.8-million tonnes a year. The process plant is designed to operate for more than 40 years and, thus, will exceed the current life-of-mine of the Mt Peake project. TNG said drilling results had indicated the potential to find additional ore in the Mt Peake area and added that the location of the plant near the Darwin port allowed for the potential for other concentrates to be shipped for processing.

“The outcomes reinforce the robust business case for the Mt Peake project and against the backdrop of a much stronger commodity environment, the updated feasibility study sets the stage for us to move ahead and secure an attractive and competitive project funding package”.

“Subject to securing a suitable funding package, the board will target a final investment decision to commence development of one of the world’s most important new strategic metals projects at a very opportune point in the global commodity cycle,” commented TNG MD Paul Burton.