TNG Limited recalculates PFS numbers

THE BOURSE WHISPERER: TNG Limited (ASX: TNG) has completed an internal technical review of the July 2012 Pre-Feasibility Study (PFS) for the company’s Mount Peake vanadium-titanium-iron project in the Northern Territory.

TNG claimed the review has led to an enhancement of the project’s economics following the identification of a miscalculation of the value of the iron component of the resource.

The technical review of the July 2012 PFS was conducted ahead of the planned commencement of a Definitive Feasibility Study (DFS) for the Mount Peake development later this year.

According to the company, the review identified the price for the hematite product at Mount Peake had incorrectly been applied to contained iron as opposed to contained iron oxide.

As a result of this finding, the original financial model for the Mount Peake PFS has been verified and updated by Snowden Mining Industry Consultants leading to:

–    An increase in life-of-mine (LOM) revenues from $11.8 billion to $13.6 billion;

–    An increase in Net Present Value (NPV8 per cent) from $1.884 billion to $2.646 billion; and

–    An increase in pre-tax IRR from 31.8 per cent to 38.7 per cent.

Needless to say TNG is pretty happy with the results saying they have dramatically enhanced the financial strength of the proposed Mount Peake mining operation and provide strong momentum for the upcoming DFS.

The company is aiming to commence construction of the project in 2014, with production and exports proposed to commence in 2015.

“Based on the revised economic model, the Mount Peake development is even more robust than initially thought and is shaping up as an outstanding growth asset for TNG shareholders,” TNG Limited managing director Paul Burton said in the company’s announcement to the Australian Securities Exchange.

The company expects to announce the award of the contract to complete the Mount Peake DFS later this month.