TNG (ASX:TNG) remains unclear on Mount Peake pre-production investments, delaying FID – The Market Herald
- TNG’s (TNG) Principal Engineer Clough Projects Australia says it is still unable to provide a pre-production capital expenditure estimate for the Mount Peake project
- Clough has been appointed to support the development of the NT-based project to become a fully integrated operation producing vanadium, titanium and iron for export
- TNG originally expected to pay $824 million in pre-production capital, with additional costs to be funded by third parties.
- Unfortunately, market conditions mean the company doesn’t have a definitive estimate and current prices are “significantly higher” than before.
- The companies are now working together to minimize overall investment and hope to complete work by the middle of next year so TNG can make a final investment decision.
- TNG plunged 16.9% into the red after the news, with shares closing at 7.4 cents each
TNG (TNG) has been advised by Clough Projects Australia that it is still unable to provide a pre-production capital expenditure estimate for the Mount Peake project.
The resource and mineral processing technology company appointed Clough as a lead engineer in June to support development of TNG’s vanadium-titanium-iron project.
Located in the Northern Territory, the Mount Peake project is said to be one of the largest undeveloped vanadium-titanium-iron projects in the world. It has also been granted ‘Major Project’ status by the governments of the Northern Territories and Australia.
The company hopes to develop the project into a consolidated, fully integrated mining and processing operation to produce vanadium pentoxide, titanium dioxide and iron oxide for export using its TIVAN process.
In 2019, TNG released a pre-production capital expenditure estimate of $824 million, assuming that additional investments of $491 million for certain equipment and factory areas would be funded by third parties.
Clough previously told TNG that market conditions had “negatively affected” his ability to advance the equipment price update and a capital expenditure estimate and the numbers he has received so far are “significantly higher” than expected.
Clough, however, believes the current price does not reflect future market decisions, so he cannot provide TNG with a definitive estimate for the Mount Peake project.
In response to the situation, Clough and TNG will work together to reduce and optimize equipment requirements through engineering exercise and additional commercial processing to minimize overall capital expenditure.
At this point, the companies expect to complete the work by mid-2023 and once complete, TNG will be able to make a final investment decision.
TNG shares plunged 16.9% into the red after the news to close at 7.4 cents apiece.