TNG Limited (ASX: TNG) has signed a Binding Term Sheet with leading Indian mining conglomerate the Vimson Group for the life-of-mine offtake of the high-purity iron ore products to be produced by the company’s flagship 100%- owned Mount Peake Vanadium-Titanium-Iron Project in Australia’s Northern Territory.
Vimson’s Singapore-based, wholly owned subsidiary, V. M. Salgaocar & Bro. (Singapore) Pte. Ltd, will purchase 100% of the iron products planned to be produced by Mount Peake on an FOB basis for global marketing and distribution, for a fixed commission.
TNG’s Managing Director and CEO, Paul Burton, said the Binding Term Sheet, together with the binding term sheet and off-take agreements the company has in place for its vanadium pentoxide and titanium pigment products, underpins the company’s commercial strategy for the Mount Peake Project and creates a strong foundation for the project’s financing and development.
“We are delighted to have signed a Binding Term Sheet with the Vimson Group to purchase our iron oxide products on a life-of-mine basis. This represents the final component of our already-impressive portfolio of Tier-1 off-take arrangements spanning all three high-value products to be delivered from the TIVAN refinery in Darwin.
“Vimson is a leader in the Indian resources sector with similar values and growth strategies to TNG, and this agreement further cements the strong relationship we have developed with them since their original investment in the Company in 2018. The planned signing of a binding life-of-mine off-take agreement is consistent with the original intentions and discussions at the time of that investment.
“Coming hard on the heels of our recent agreement with GUNVOR (Singapore), the signing of this Binding Term Sheet means that the forecast Mount Peake production is now fully under contract, strongly supporting a move into the financing and execution phase.
“Achieving this outcome in the current challenging global market environment is a solid achievement by our team and is testament to the project’s quality, scale and robustness. We look forward to working closely with V. M. Salgaocar & Bro. and executing the final binding off-take agreement for the long term.”
TNG intends to produce approximately 500,000 tonnes per annum of iron oxide fines from its planned Darwin-based TIVAN Processing Facility, alongside high-purity vanadium pentoxide and titanium pigment products.
Mr Burton said TNG and V. M. Salgaocar & Bro. will now work towards completion of a final binding life-of-mine agreement not later than six months from the date of the Binding Term Sheet.
The Vimson Group, which is a major shareholder in TNG with a stake of 9.84%, is a family-owned Indian conglomerate with extensive interests in mineral resources, financial services, real estate development, healthcare and sports. Its head office is in Goa, India, with other offices in Mumbai, Delhi, Bengaluru, and Singapore.
It has been in the business of mining, processing and transporting iron ore from its fully integrated supply chain in India since 1952 and has been supplying leading Japanese, Korean and Chinese companies including Nippon Steel and POSCO.