Export Finance Australia (EFA) has sent a provisional Letter of Support to TNG Limited, with a conditional $300 million of debt funding for TNG’s flagship Mount Peake Vanadium-Titanium-Iron project (Mount Peake) in the Northern Territory.
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 Federal and Northern Territory Governments.
Australian resource and mineral processing technology company, TNG and its Mount Peake Project is one of 15 Australian critical minerals projects identified by the Federal Government in its Resources Technology and Critical Minerals Processing: National Manufacturing Priority Road Map.
EFA’s non-binding Letter of Support notes the need for progress on a number of commercial matters and outlines the following:
- EFA can consider the provision of debt funding up to $300 million
- A successful outcome is contingent on several conditions including:
- Meeting EFA ‘know your customer’, sanctions and anti-bribery requirements and checks
- Provision of detailed financing proposal and independent due diligence material
- TNG making satisfactory progress towards the Mount Peake Project’s funding plan including the raising of equity and securing funding from other lenders
- TNG making satisfactory progress securing offtake agreements for the Mount Peake’s products with counterparties acceptable to EFA
- A contracting strategy and contractors for the engineering, construction and commissioning of the project acceptable to EFA
- Mount Peake Project complying with its environmental and social risk policies, including receiving the required regulatory and environmental approvals
The receipt of this non-binding Letter of Support highlights the broad alignment of the project with objectives of the Federal Government’s Critical Minerals Strategy which is to diversify global critical minerals supply and capture more value from the critical minerals value chain.
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.
TNG’s Managing Director and CEO, Paul Burton, said the company welcomed the support received by the Federal Government through the EFA.
“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,” Mr Burton said.
“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.”
EFA is Australia’s export credit agency and is guaranteed by the Commonwealth of Australia. EFA is administering the Federal Government’s $2 billion Critical Minerals Facility, which has been established to assist in funding critical minerals projects.
