PERTH (miningweekly.com) – Strategic metals company TNG has set its sight on an optimised two-million-tonne-a-year development for its Mt Peake vanadium/titanium/iron project, in the Northern Territory, which has the potential to reduce capital costs by A$29-million.

TNG on Wednesday told shareholders that as part of the ongoing front-end engineering design (FEED) process for the Mt Peake project, a development strategy based on an initial production rate of two-million tonnes a year, delivering 100 000 t/y of titanium dioxide pigment, had been selected.

Previous feasibility studies were conducted at a three-million-tonne-a-year rate during an initial production stage, increasing to six-million tonnes a year after four years of production.

At a reduced mining rate, the project’s expected initial capital expenditure has been reduced from the original estimate of A$853-million to A$824-million, while the mine life has been extended from 17 years to 37 years.

The revised development strategy will deliver a pre-tax net present value of A$2.8-billion and an internal rate of return of 33%, delivering life-of-mine net cash flows of A$12.2-billion.

At a later date, and after financial completion of the construction and operation of the two-million-tonne-a-year plant, TNG could consider an expansion of the production capacity, the company said.

“These results demonstrate the significant value of our continuing internal reviews and the detailed FEED study work streams currently being undertaken by our strategy development partner SMS group, supported by Como Engineers, Ti-Cons, Snowden and METS,” said TNG MD and CEO Paul Burton.

“The ongoing optimisation work and information fed back from FEED to our mining planners resulted in a further refined mining schedule. Further optimised beneficiation and TIVAN flowsheets are expected to yield savings in up-front capital expenditure, which the company expects to be confirmed on completion of the FEED study.”

Burton said that TNG now had a streamlined, simplified project, making a final investment decision simpler and improving the likelihood of achieving financial close in the current challenging financial market environment.