Australian strategic metals company TNG Limited (ASX: TNG) inks an off-take arrangement for its third high-value product from flagship project in Northern Territory.
Today on Tuesday, the company unleased the binding term sheet that it has signed with Zurich based market expansion services provider ‘DKSH’ for the distribution of its titanium dioxide (TiO2), a final product from its 100% Mount Peake project.
With this off-take arrangement TNG now have the life-of-mine distributor partnership for all the three commercial products that it produces from Mount Peake project, i.e. Vanadium pentoxide, Titanium Dioxide, Iron Oxide.
Publicly listed on Swiss Exchange DKSH is a leading market expansion services provider across the Asia-Pacific region. Under the binding term sheet with TNG Limited, DKSH will purchase up to 100% of TNG’s TiO2 production and then distribute it globally. Along with providing full-fledged distribution services DKSH will also provide freight financing, technical assistance, logistics, marketing and sales for TNG’s titanium dioxide.
The signing of a Binding Term Sheet with DKSH follows two already held agreements for TNG’s vanadium and iron products. It includes binding life-of-mine off-take agreement that TNG signed for minimum 60% of it vanadium output with WOOJIN Metals in March 2015. One year later in March 2016, the company made the same arrangements with Singapore based Gunvor for iron products.
TNG’s Managing Director, Mr. Paul Burton, stated this agreement with DKSH represents another major step forward for TNG’s shareholders and for the Mount Peake Project. He added the company is looking forward to finalising a binding off-take agreement within six months, which will mean that the project will have binding off-take agreements in place for all three of its high-value products.
Earlier the company has confirmed its potential to produce high-grade titanium pigment through the feedstock obtained from the leaching phase of the TIVAN process, where the vanadium and iron have been dissolved into solution. This technical breakthrough that was confirmed in February 2018 has been taken a step closer to the final close of end-product sale. It will not only surge the economic outcomes of the Mount Peake Project, rather it will also reduce the technical complexity and environmental impact of the project as the TIVAN’s titanium feedstock has a low iron content that can significantly minimise the environmental impact compared to a standard sulphate titanium pigment production process.
Commenting on the signing of a Binding Term Sheet with TNG, DKSH’s Co-Head Business Unit Performance Materials, Dr Natale Capri stated with DKSH’s market coverage and long-standing global track-record in the distribution of specialty chemicals to the plastics and coatings industry, DKSH is TNG’s optimal partner to exclusively market their titanium dioxide pigments.
This deal marks another important milestone that TNG has achieved recently, following an updated Feasibility Study and Financial Model for the Mount Peake Project that was completed in November 2017, the signing of the landmark Mount Peake Native Title Mining Agreement in October 2018 in relation to Mount Peake Mining Leases license.
On the good news of TNG’s titanium dioxide distribution arrangement investors got bullish. TNG Limited share price jumped as much as 9.524% or $0.010 to trade at $0.115 on 30 October 2018 (1:35 PM AEST).
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