TNG Limited (ASX:TNG) has received a conditional Letter of Support from Export Finance Australia (EFA) that considers the provision of up to A$300 million of debt funding for the construction of TNG’s flagship 100% owned Mount Peake Vanadium-Titanium-Iron project in Australia’s Northern Territory.
EFA is Australia’s export credit agency and is guaranteed by the Commonwealth of Australia. It is administering the Australian Government’s A$2 billion Critical Minerals Facility, which has been established to assist in funding critical minerals projects.
The Mount Peake Project is one of 15 Australian critical minerals projects identified by the Australian Government in its Resources Technology and Critical Minerals Processing: National Manufacturing Priority Road Map.
The Mount Peake Project, which is one of the largest undeveloped vanadium-titanium-iron projects in the world, has been awarded Major Project Status by both the Australian Government and the Northern Territory Government.
The receipt of this non-binding Letter of Support highlights the broad alignment of the Project with objectives of the Australian Government’s Critical Minerals Strategy which is to diversify global critical minerals supply and capture more value from the critical minerals value chain.
EFA’s non-binding Letter of Support notes the need for progress on a number of commercial matters and outlines the following: 1. EFA can consider the provision of debt funding up to A$300 million; 2. a successful outcome is contingent on several conditions including: a. meeting EFA “know your customer”, sanctions and anti-bribery requirements and checks; b. provision of detailed financing proposal and independent due diligence material; c. TNG making satisfactory progress towards the Project’s funding plan including the raising of equity and securing funding from other lenders; d. TNG making satisfactory progress securing offtake agreements for the Project’s products with counterparties acceptable to Export Finance Australia; e. a contracting strategy and contractors for the engineering, construction and commissioning of the Project acceptable to Export Finance Australia; and, f. the Project complying with our environmental and social risk policies, including receiving the required regulatory and environmental approvals.
The tenor of the Project will be supported by Mount Peake’s long project life (>37 years) and JORC Ore Reserves.
TNG’s debt financing strategy is to secure a multi-source funding package consisting of government and commercial bank funding. Pursuing a multi-source funding strategy allows TNG to optimise its debt financing, providing greater access to low-cost lending, offering greater flexibility in loan structuring and ensuring that TNG’s funding package aligns with its development and offtake partners.
Following the accomplishment of this important milestone for the Mount Peake Project, TNG will now further engage with EFA to progress the customary due diligence process for obtaining finance. EFA’s non-binding Letter of Support does not constitute a commitment to provide finance and there is no certainty that an agreement will be reached between the parties.
“We are delighted with the support received from the Australian Government through the Export Finance Australia,” TNG’s Managing Director and CEO, Paul Burton, said
“This non-binding Letter of Support lays a solid foundation for the Company to secure the debt financing package for the development of its Mount Peake Project.
“Mount Peake is a significant critical minerals project for Australia as it will contribute to the diversification of global critical minerals supply, specifically of vanadium and titanium, and will bring more value from the critical minerals value chain to the country.
“We are looking forward to continue working with the Export Finance Australia and other financiers to structure the best debt financing package for the Project.”
For further information please visit: https://www.tngltd.com.au/