TNG Ltd (ASX: TNG) yesterday signed a Heads of Agreement (HOA) with BBI Group for strategic cooperation. TNG and BBI to evaluate the application of TNG’s pollymetallic processing technology TIVAN on BBI’s Balla Balla vanadium-titanium-iron project in the Pilbara.
The BBI group are a subsidiary of the Todd Corporation, one of New Zealand’s largest companies. The group have 100% ownership of the huge Balla Balla project in Western Australia (456 MT at 0.64% V2O5, 13.7% TiO2 and 45% Fe). The group are also involved in organising substantial infrastructure for potential AUD$5.5 billion dollar project including rail and port construction.
The potential for TNG to garner royalties on the project via the TIVAN process has shareholders anticipating a TIVAN plant in Western Australia and on other projects worldwide.
Despite the good news shares in TNG were down 10% yesterday due largely to a lack of news on any progress with a Traditional Owners agreement on TNG’s Mount Peake project. Investors had been hoping a recent meeting of the Central Land Council (CLC) would have seen the signing of the agreement - negotiations on which have seemingly dragged on for longer than anticipated.
The Mount Peake project north of Alice Springs contains a JORC resource of 160 MT at 0.28% V2O5, 5.3% TiO2 and 23% Fe. While the lower grade resource may have been uneconomic using traditional processing methods TNG have developed and refined the proprietary metals processing TIVAN solution with the help of the German SMS group. The process has the figures on Mount Peake looking highly attractive - though delays in getting the large project underway have seen the share price stagnate.
The announcement yesterday while an exciting development for the future of the company was not the one retail investors would most like to see. TNG have been negotiating a titanium off-take for some time, including a rejigging the TIVAN process add-ons to suit final product specifications. Investors are clearly waiting for news on this and the CLC before jumping on board. Once these deals are finalised, and finance is announced the NPV of the Mount Peake project, a staggering AUD$4.7 billion ought to quickly begin to be realised in the share price.