DEVELOPING A WORLD-CLASS VANADIUM-TITANIUM-IRON PROJECT MOUNT PEAKE, NORTHERN TERRITORY. INFORMATION MEMOR ANDUM

Transcription

1 DEVELOPING A WORLD-CLASS VANADIUM-TITANIUM-IRON PROJECT MOUNT PEAKE, NORTHERN TERRITORY INFORMATION MEMOR ANDUM

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3 MOUNT PEAKE: A WORLD-CLASS VANADIUM-TITANIUM-IRON DEPOSIT The Mount Peake Project is located in the Arunta geological province, approximately 230km north of Alice Springs in the Northern Territory of Australia. The deposit was discovered in 2008 when TNG outlined a magnetite-bearing gabbro containing high-grade vanadium, titanium and iron. The mineralisation commences at shallow depths making the deposit readily amenable to open pit mining. A Feasibility Study was completed in July 2015, with forecast 20 year life of operation, cash flow of A$11.6 billion, a NPV of A$4.9 billion, and a pre-tax IRR of 41%. The Project is located close to key infrastructure. The mine lies within 80km of the rail line, and will transport the magnetite concentrate to be treated at the Darwin refinery, on a site adjacent to the port. FAST FACTS A QUALITY INVESTMENT ASSET World-class strategic metals asset containing three valuable metals vanadium-titanium-iron Northern Territory Government awarded Major Project Status recognising it as a designated major project of significance to the region. Completion of Feasibility Study in mid 2015 which includes the maiden Ore Reserve calculation Ore Reserve (July 2015) under JORC 2012 high degree of confidence in the orebody 100% TNG owned Staged growth with output doubling after four years Incorporation into the Darwin TIVAN refinery of titanium pigment and pig iron plants to produce higher-value products Strong global growth forecast for vanadium and titanium pigment (growing at 5-7% per annum) Proprietary TIVAN hydrometallurgical process allows for production of high purity product Direct access to Darwin Port, with good access to road, rail and gas infrastructure A$11.6 billion in net cashflow over the 20-year project life Pre-tax IRR of 41% and NPV (8%) of A$4.9 billion Payback period of four years Production aimed to commence in

4 PRODUCTION FACTS MINE LIFE: 20 years (minimum) TARGET ANNUAL PRODUCTION Vanadium Pentoxide 99.6% purity 17,560t Titanium Dioxide Pigment 90% purity 236,000t Pig Iron 95% purity 637,000t MINESITE 50km from sealed major highway 80km from main railway 20km from gas supply 20km from water supply MOUNT PEAKE PROJECT KEY METRICS 2015 PRE-FEASIBILITY STUDY ASSUME PRODUCTION START IN 2018 CAPEX (STAGE ONE): AUD $970M OPEX (MINE PLUS REFINERY): MINE LIFE: AUD $167/t of Ore Mined 20 years TOTAL REVENUE (LOM): AUD $27.3B NET ANNUAL CASH FLOW: AUD $785M NPV: AUD $4.9B IRR PRE-TAX: 41% EXCHANGE RATE: AUD 1 = USD 0.75* (10% fall in AUD = 20% increase in NPV) Total Metal Production Tonnes V 2 O 5 265,000 TiO 2 3,750,000 Pig Iron 9,629,000 Average Concentrate Grade % V 2 O % TiO % Fe 52.3% Refinery Recovery % V 2 O % TiO % Fe 85.3% Metal Purity % V 2 O 5 99% TiO 2 > 90% Pig Iron³ 95% MOUNT PEAKE PROJECT - FOCUS LOCATION AND TENURE The Mount Peake project area is located approximately 230km north of Alice Springs, and 60km west of the sealed Stuart Highway to Darwin. The LNG gas pipeline runs 20km east of the project area and the Darwin to Adelaide railway 80km to the east. The project comprises seven exploration licences, one exploration licence in retention and four mining lease applications (EL27069, EL27070, EL27941, EL28491, EL29578, EL30483, EL29867, ELR29578, MLA28341, MLA29855, MLA29856, and MLA30686) held by TNG, through 100% owned subsidiary Enigma Mining Ltd. An exploration agreement is in place with the Traditional Landowners and the Central Land Council (CLC). The minesite, plant, camp, rail facility and transport corridor have all been cleared of any Sacred Sites by the Traditional Owners and the CLC, and negotiations for a mining agreement have commenced. 4

5 STAGED DEVELOPMENT STAGE 1: PRODUCTION YEARS 1-4 CAPEX A$970M ORE MINING RATE: 3,000,000 tpa MAGNETITITE CONCENTRATE: 900,000 tpa AVERAGE ANNUAL REFINERY PRODUCTION (YEARS 1-4) V205 FLAKE: TIO2 PIGMENT: PIG IRON: STAGE 2: PRODUCTION CAPEX ORE MINING RATE: MAGNETITITE CONCENTRATE: 10,700 t 150,000 t 360,000 t YEARS 5 ONWARDS A$792M 6,000,000 tpa 1,800,000 tpa AVERAGE ANNUAL REFINERY PRODUCTION (YEARS 5 ONWARDS) V205 FLAKE: TIO2 PIGMENT: PIG IRON: 20,000 t 268,000 t 740,000 t MELVILLE ISLAND AI DARWIN CROKER ISLAND AI AUSTR ALIA KATHERINE MANBARRUM Zn - Pb - Ag - Cu HIGH BLACK RANGE Fe McARTHUR RIVER Cu - Zn - Pb NORTHERN TERRITORY TENNANT CREEK GODDARDS Cu ROVER Cu - Au WESTERN AUSTR ALIA MOUNT HARDY Cu MOUNT PEAKE V - Ti - Fe SANDOVER Cu QUEENSLAND PETERMANS Au - Cu - U STOKES YARD Cu - Zn - Pb ALICE SPRINGS South AUSTR ALIA 5

6 Figure 1: Location diagram showing the Mount Peake Project tenure against the background of a regional aeromagnetic image with the regional magnetic targets shown surrounding the central Mount Peake Resource (red star) GEOLOGY AND PROSPECTIVITY The Mount Peake V-Ti-Fe deposit is hosted by a gabbro body which has intruded outlier sediments of the Georgina Basin. These Neoproterozoic sediments rest unconformably on metasediments and granites of the Aileron Province within the Lower Proterozoic Arunta Region. The mineralised Mount Peake gabbros are part of a NW trending sill complex named the Murray Creek Sill which covers an area of up to 20x60km across surrounding TNG tenements. Interpretation of airborne magnetic data indicates several additional targets within the tenement area (Figure 1). The Murray Creek Sill comprises gabbros, olivine gabbros, leucogabbros, and the ore host magnetite-rich (5 to >50% magnetite) olivine gabbro near the top of the sill. MINERAL RESOURCE A shallow large-scale resource underpins the longlife Mount Peake Project. Snowden Mining Industry Consultants Pty Ltd (Snowden) completed an updated JORC 2012 compliant Resource estimate for the Mount Peake V-Ti-Fe Project in March The Measured, Indicated and Inferred Resource is shown in Table 1. The resource estimate is based on drilling completed in late 2012, which was intended to convert predominantly Indicated and Inferred Resource material to Measured Resource status. The previous resource calculation comprised 110Mt of Indicated Resource and 48Mt of Inferred Resource. Key inputs used for the resource calculation include: 16,856.6m of diamond and Reverse Circulation (RC) drilling were used (more than double the amount of drilling used for the previous calculation); Cut-off grade applied 0.1% V2O5; Densities applied - from 2.51 (weathered material) to 3.40 (fresh ore); and Ordinary kriging was used. ORE RESERVE As part of the Feasibility Study completed in mid 2015 an Ore Reserve was calculated, under JORC 2012 guidelines, by Snowden. The Ore Reserve used a cut-off grade of 15% Fe and is outlined in Table 2. The life of mine ROM inventory is 77.8 Mt which will generate 21.7 Mt of magnetite concentrate. 6

7 Schematic view of the Mount Peake magnetite resource. TABLE 1: MINERAL RESOURCE (JORC 2012) FOR MOUNT PEAKE, MARCH Total Metal Production Tonnes (Mt) V 2 O 5 % TiO 2 % Fe% Ai % SiO 2 % Measured Indicated Inferred TOTAL TABLE 2: MAIDEN ORE RESERVE (JORC 2012) FOR MOUNT PEAKE, JULY Cut-off grade (15% Fe) Mount Peake Project Ore Reserve Ore (Mt) V 2 O 5 (%) TiO 2 (%) Fe (%) Proved Probable TOTAL

8 TIVAN PROCESS METAL EXTRACTION Neutralisation Agent Hydrometallurgical process that extracts high purity vanadium, titanium and iron (patent pending) FS Pilot plant test work results: (refer ASX Announcement 8/7/2015) Stripping Agent NEUTRALISATION TANK >99% V 2 O 5 Precipitation Agent >99% Fe 2 O 3 TITANIUM STRIPPING >65% TiO 2 Final optimization and design work is well advanced. Stripping Agent TITANIUM PRECIPITATION TANK Patent/Trademark registered in 12 countries. The iron and titanium products from the TIVAN refinery will feed into the Pig Iron and Titanium Pigment plants (respectively) to be refined into higher value saleable products. VANADIUM STRIPPING Stripping Agent VANADIUM PRECIPITATION TANK Precipitation Agent IRON STRIPPING Fresh Extractant REGENERATED EXTRACTANT PRODUCT 1: VANADIUM PENTOXIDE V 2 O % PURITY Current global vanadium consumption is approximately 90,000 tonnes (source: Roskill) Current price approximately US$18/kg (US$18,000 / tonne) MAIN USES: STEEL: Ferro-vanadium FeV; Corrosion resistant ENERGY: Power, Energy and Nuclear applications HIGH TECHNOLOGY: Vanadium Pentoxide V 2 O 5 MULTIPLE new technology uses 8

9 STRONG GLOBAL GROWTH FORECAST GLOBAL VANADIUM CONSUMPTION VANADIUM STEEL MARKET SHARE Source: Roskill FORECASTS VANADIUM PENTOXIDE An essential component in the development of high-strength steels forecast to increase at approximately 5% per year to Chinese moving towards minimum rebar grade for reinforced steel used in construction: REBAR GRADE 3 if enforced could add 40,000t per annum to global demand. NEW DEVELOPMENTS VANADIUM PENTOXIDE Essential element for some new batteries ELECTRIC CARS: Demand increasing due to rising energy prices and CO 2 reduction targets. Approximately 8kg of pure vanadium is used to produce one lithium-ion car battery. 1 million hybrid cars would require 8000t of vanadium. POWER STORAGE: Investment in power storage increasing. Source: Roskill 9

10 LITHIUM VANADIUM BATTERY V DEMAND VANADIUM REDOX FLOW BATTERY V DEMAND CHART ENERGY VANADIUM PENTOXIDE Vanadium REDOX Batteries (VRB s) Volume storage for the electricity generated by solar and wind power. Approximately 7kg of high purity Vanadium Pentoxide per kwh is required for a single VRB (Source: Roskill) Japan is building the worlds largest VRB capable of producing 60,000kWh - 420t Vanadium Pentoxide (Source: Japan Times, September 2013). PRICE FORECAST VANADIUM PENTOXIDE Strong price increase forecast as a result of forecast increased demand. METAL BULLETIN V PROJECTION CHART Source: Roskill 10

11 PRODUCT 2 TITANIUM DIOXIDE PIGMENT >90% TIO 2 Forecast 7% annual growth increase in demand (Source: Roskill) USES: HIGH TECHNOLOGY COATING AND PIGMENTS MEDICAL CONSUMER GOODS INFRASTRUCTURE PRICE FORECAST TITANIUM DIOXIDE PIGMENT Strong Price Forecast for High Purity Product. TIO 2 WORLD ANNUAL AVERAGE PRICE FORECAST (US$ PMT) Source: Ti Insight LLC 11

12 PRODUCT 3 PIG IRON IRON 95% Fe Industry standard product with a strong price and guaranteed markets. USES: STEEL MANUFACTURING METAL CASTING INDUSTRY MOUNT PEAKE DEVELOPMENT PATHWAY TO PRODUCTION Completion of Pilot Plant test work Pre-Feasibility Study completion 2012 Commercialisation of TIVAN Feasibility Study / EPCM, off-take agreements, EIS Partner for development (eg leading steel company) Financing Construction Production TNG LIMITED ACN Contact: Paul Burton, Managing Director PO Box 1126 Subiaco Western Australia 6904 T F corporate@tngltd.com.au jaz.com.au