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What the Analysts Say

Thursday, May 26, 2016

WHAT THE ANALYSTS SAY: Breakaway Research has released coverage on TNG Limited and Orinoco Gold.


Company: TNG Limited (ASX: TNG)

TNG has continued to progress the key Mount Peake vanadium-titanium-iron project with the signing of a number of additional agreements relating to offtake, financing, development and permitting. These build on previous agreements.

Of these, the signing of the offtake agreements for 60 per cent of the life of mine iron and vanadium products are critical, in that these will be vital in helping secure finance through underpinning projected revenue.

TNG is currently in negotiations on the crucial titanium product offtake.

The signing of financing and TIVAN plant development agreements with the SMS Group further cements the strong relationship with this longstanding key partner, and in Downer EDI and McMahon Services the company has entered into agreements with world class potential development partners and project managers.

Key price drivers include securing titanium offtake and project finance, and completing permitting.

TNG is concentrating activities on financing and permitting for its flagship Mount Peake vanadium-titanium-iron project, located north of Alice Springs in the Northern Territory.

The project has the potential to be a major global supplier of premium grade vanadium, as well as high purity iron and titanium products.

The TIVAN hydrometallurgical process is being developed by TNG and partners to be a low cost method of leaching titano-magnetite concentrates to extract all valuable components, including vanadium, iron and titanium.

The company also holds a number of other base and precious metals projects in the Northern Territory, which it plans to spin out, via an IPO, into Todd River Resources.


Company: Orinoco Gold (ASX: OGX)

Development of Orinoco’s 70 per cent-held Cascavel gold project in Brazil is well advanced.

However, hold-ups in customs clearances have delayed the expected start-up by four to five months, with commissioning now expected in the second half of June.

All plant has now been delivered to site, with final construction underway.

Despite the construction delays to the surface plant, the company has continued to advance its underground development, and now has some three months of ore ready for stoping when plant commissioning is complete.

The development work has confirmed the geometry, continuity and grade of the mineralisation, with the expected diluted production grade of approx. 20 grams per tonne gold supported by some very high grades in the development sampling.

Results of drilling at Sertão have supported the interpretation that the mineralisation is similar to that at Cascavel, hosted in parallel shoots within an overall gently dipping mineralised thrust – one shoot has now been intersected for 1,600 metres down plunge, and thus Sertão could be a potential future mining operation.

Near mine exploration at Cascavel also continues to return very encouraging results.

Short to medium term price movers will include demonstrated production at target levels, exploration success and gold price movements.

Orinoco is an ASX-listed company concentrating efforts on orogenic gold mineralisation in the highly prospective Goiás region of central Brazil.

The key development project is the company’s Cascavel gold project, part of its broader Faina Goldfields project, which covers some 300 square kilometres of greenstone units.

The company’s strategy is to initially develop a relatively small scale, start-up operation, with plans to then increase resources and mine life by funding drilling and other exploration activities from operational cash flow.

Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.

The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.

The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.