ASX ANNOUNCEMENT

28 October 2015

September 2015 Quarterly Activities Report

Mount Peake poised for financing and development

HIGHLIGHTS

MOUNT PEAKE VANADIUM-TITANIUM-IRON PROJECT (NT)

• Binding Life-of-Mine Offtake Agreement signed with major Korean ferro-vanadium group, WOOJIN IND. CO. Ltd (WJN), for a minimum of 60% of all vanadium products produced from the Mount Peake Vanadium-Titanium-Iron Project in the NT.

• Binding Life-of-Mine Technology Transfer agreement also signed with WJN for TNG's use of WJN's proprietary technology for the production of ferro-vanadium at the TIVAN refinery site. WOOJIN's proprietary technology currently has the world's highest vanadium recovery rate and is expected to allow TNG significant additional profitability over the project's life.

• Memorandum of Understanding with Caterpillar Financial Australia for the provision of project finance and/or equipment finance for Mount Peake. The MOU provides scope for Cat Financial to participate in a project funding package in conjunction with other relevant financiers.

• Highly experienced industrial and construction group McMahon Services appointed as Mount Peake Project Manager subsequent to the end of the Quarter to coordinate pre-development activities on behalf of TNG for the interim period until a final construction commitment and project finance is secured.

• Sacred Site Clearance Certificate received from the Central Land Council for the Mount Peake Mine Tenements including the mine and site infrastructure, camp, haul road and rail siding. This Certificate provides approval and clearance for TNG to construct the open cut mine, camp facility, haulage road, access road and rail siding at Mount Peake.

• Subject to all approvals, permitting and financing, construction of Mount Peake is planned to commence in 2016 with first production scheduled for early 2018.

  
  

  MOUNT PEAKE VANADIUM-TITANIUM-IRON PROJECT (NT) - Definitive Feasibility Study

  • Mount Peake Definitive Feasibility Study completed in July 2015 (outlined in detail in the June 2015 Quarterly Report), which delivered robust financial and technical outcomes including:

    • Pre-production capital cost estimate of A$970M (Stage 1 infrastructure, mine site, concentrator and Refinery);

    • Pre-tax net annual average production cash flow of A$785 million;

    • Life-of-mine net cash-flow of A$11.6 billion;

    • Pre-tax IRR of 41%;

    • Two year pre-production period for construction;

    • Initial 17-year project life;

    • 3Mtpa (Stage 1) mining operation expanding to 6Mtpa (Stage 2) after 4 years of production;

    • Average annual production of 17,560tpa V2O5, 236,000tpa TiO2 (pigment), 637,000tpa Pig Iron;

    • Pay back of 4 years.

      
      

      TIVAN® HYDROMETALLURGICAL PROCESS

  • TIVAN® pilot testwork completed with exceptional results. These results formed a vital input for the Mount Peake DFS delivered in July 2015. Further value-add optimisation work is being undertaken prior to final design.

    
    

    CORPORATE

  • Over $4.0 million raised following strong take-up of TNGO listed options by shareholders.

  • Notification received from substantial shareholder, Ao-Zhong International Mineral Resources Pty Ltd, that Ao- Zhong had reduced its shareholding in TNG from 8.74% to 6.31% due to matters involving Ao-Zhong's parent entity, ECE.

  • Cash reserves of $6.7M at Quarter-end.

SUMMARY

Following the delivery of the Definitive Feasibility Study (DFS) for the Company's flagship Mount Peake Vanadium-Titanium- Iron Project in the Northern Territory on 31 July 2015, the September 2015 Quarter has seen further outstanding progress for TNG, with the Company making strong headway towards securing binding agreements to support the Project's development.

As outlined in the June 2015 Quarterly Activities Report, the DFS delivered exceptional results, outlining a world-class project capable of generating outstanding returns for shareholders. The DFS found Mount Peake would generate a pre-tax internal rate of return (IRR) of 41% based on a pre-production capital cost of A$970 million, total estimated life-of-mine net cash flow of A$11.6 billion and operating cash flows of A$13.6 billion over an initial 17-year project life.

Following hard on the heels of these results, TNG secured its first binding off-take agreement for Mount Peake with the major Korean-based ferro-vanadium group WOOJIN IND., CO., LTD., (WJN).

The life-of-mine off-take agreement encompasses binding commitments for WJN to take or pay a minimum of 60 per cent of the vanadium pentoxide (V2O5) and other vanadium products from Mount Peake with a minimum guaranteed price which is, based on the cost of production estimates determined under the DFS, 20% above TNG's forecast cost of production. This off- take agreement will allow more accurate forecasts of project's revenue and profitability and creates a strong foundation for the project's financing and development.

TNG also entered into a binding agreement for the transfer of ferro-vanadium (FeV) production technology from WJN. This technology will allow TNG to further diversify the product portfolio assumed in the DFS, move up the vanadium value chain with a product that is directly saleable to major steel mills on a global basis and take advantage from any price advantage of one product over the other (V2O5 vs FeV). WJN's proprietary technology has the world's highest vanadium recovery rate and TNG expects this to significantly benefit the company with additional profitability over the project's life.

In addition, subsequent to the end of the Quarter, TNG signed a Memorandum of Understanding (MOU) with Caterpillar Financial Australia Limited ('Cat Financial') to consider the provision of project and/or equipment finance, for the development of the Mount Peake Project, subject to due diligence, approvals, agreed terms and documentation.

It is envisaged that the MOU with Cat Financial, once converted into a binding agreement, will form part of the diversified project finance consortium being assembled to fund the Mount Peake Project. The supply of mobile mining and power equipment represents a significant component of the overall capital cost for development of the project.

Also subsequent to the end of the Quarter, TNG appointed McMahon Services as Interim Project Manager to coordinate the pre-development activities at Mount Peake. McMahon Services ('MCM') is an industry-leading, privately-owned industrial, construction and environmental service provider that has delivered some of Australia's most ambitious and significant construction services projects.

MCM was closely involved with the Mount Peake DFS and contributed significantly to the outstanding outcomes it delivered. It also has a well-established record of facilitating and developing projects both in the Northern Territory and Australia-wide. As Interim Project Manager, MCM will play an integral role in managing and finalising the Mount Peake Project pre- development work, enabling TNG to focus on securing project finance and final permitting.

Project permitting was advanced during the Quarter with the receipt of a Sacred Site Clearance Certificate from the Central Land Council (CLC) for the mine and associated infrastructure required for Mount Peake. This Certificate provides approval and clearance for TNG to construct the open cut mine, camp facility, haulage road, access road and rail siding, and paves the way for TNG to conclude negotiations with the CLC for the Mining Agreement, after which the Mining Licence can be issued by the Northern Territory Minister for Mines, the Hon David Tollner.

Subject to receipt of all approvals, permitting and financing, construction of Mount Peake could commence in 2016 with potential first production in early 2018, when independent commodity forecasts indicate that the price of V2O5 is expected to be substantially higher than current prices.

On the corporate front, TNG received a significant injection of capital during the reporting period with A$4.0 million raised following a strong take-up of TNGO listed options by the Company's shareholders.

PROJECTS

VANADIUM-TITANIUM-IRON

Mount Peake Project: TNG 100%

The Mount Peake Project is emerging as a world-scale strategic metals project located 235km north-west of Alice Springs in the Northern Territory close to existing key power and transport infrastructure including the Alice Springs-Darwin Railway and the Stuart Highway. With a JORC Measured, Indicated and Inferred Resource totalling 160Mt (118Mt Measured, 20Mt Indicated, 22Mt Inferred), grading 0.28% V2O5, 5.3% TiO2 and 23% Fe, Mount Peake is one of the largest undeveloped vanadium-titanium-iron projects in the world. The area under licence covers a highly prospective, but poorly explored part of the Western Arunta geological province which offers significant exploration upside for TNG within an extensive 100%-owned ground-holding.

TNG completed a Feasibility Study on the Mount Peake Project in July 2015, paving the way for project financing and development to proceed. Results of the DFS were provided in full in the Company's June 2015 Quarterly Report, with key highlights provided below.

Definitive Feasibility Study - Summary

DFS results show an increase in life-of-mine revenues and cash flows compared to the previous results from the Pre- Feasibility Study (PFS) completed in 2012 (see ASX Announcement - 15 July 2013).

The DFS is based on the production of magnetite concentrate on site at Mount Peake. The DSF assumes that concentrate will be trucked to a rail siding and then railed north to a TIVAN® Refinery facility to be located approximately 10km from Darwin Port. From the magnetite concentrate the TIVAN® facility will produce high-purity vanadium pentoxide, titanium dioxide concentrate and iron oxide. Associated downstream plants will produce high grade titanium pigment, and pig iron.

While the additional plant facilities increase the capital requirement of the project, the higher revenues achieved from the higher value end products provide the Company with the potential for an early payback (

DFS financial model

The DFS financial model was compiled and audited by Snowden. Key assumptions and findings are as follows:

Summary of Key Financial Parameters from cash flow model:

Mine Life: 15 years

Pre-production capital cost estimate (including all infrastructure: A$970 million

Total operating costs (including mining, processing, transport & royalties): A$167 per tonne of ore Total revenue (life-of-mine): A$27.3 billion

Operating cash flow (life-of-mine): A$13.6 billion

Net cash flow (life-of-mine): A$11.6 billion

Discount rate: 8%

Pay back: 4 years

Nett annual operating cash flow: A$780M

IRR pre-tax: 41%

NPV (at 8% discounted) A$4.9 billion

Binding Life-of-Mine offtake and technology agreements signed with WOOJIN

During the Quarter, TNG secured its first binding off-take agreement for the Mount Peake Project, along with a technology transfer agreement for the TIVAN refinery. These landmark agreements, with the major Korean-based ferro-vanadium group WOOJIN IND., CO., LTD., (WJN), were signed by TNG's Managing Director, Mr Paul Burton, and WOOJIN's CEO, Mr Ki, at a formal ceremony held at WOOJIN's headquarters in Seoul, Korea.

The life-of-mine off-take agreement encompasses binding commitments for WJN to take or pay a minimum of 60 per cent of the vanadium pentoxide (V2O5) and other vanadium products from Mount Peake with a minimum guaranteed price which is, based on the cost of production estimates determined under the DFS, 20% above TNG's forecast cost of production. This off- take agreement will allow more accurate forecasts of the project's revenue and profitability and creates a strong foundation for the project's financing and development.

TNG also entered into a binding agreement for the transfer of ferro-vanadium (FeV) production technology from WJN. The FeV conversion plant will be installed at TNG's TIVAN® refinery site. This technology will allow TNG to further diversify the product portfolio assumed in the DFS, move up the vanadium value chain with a product that is directly saleable to major steel mills on a global basis and take advantage from any price advantage of one product over the other (V2O5 versus FeV).

WJN's proprietary technology has the world's highest vanadium recovery rate and TNG expects this to significantly benefit the Company with additional profitability over the project's life.

The signing of these binding agreements cements TNG's strategic plan to become a major player in the global supply chain of vanadium, securing a long-term partnership with one of the world's leading high quality ferro-vanadium producers.

Figure 1: WOOJIN CEO and Chairman Mr Ki (left) with TNG's

Managing Director Mr Burton.

Both agreements are governed by Singapore law and require the parties to obtain any relevant approvals regulatory and governmental approvals in Australia and Korea for implementation when production commences which is assumed to be in 2018 subject to finance and all regulatory approvals.

The signing of these two binding agreements marks a significant milestone for the Mount Peake Project following the completion of the DFS and will assist in the Company's financing and commercial plans to deliver on its project development schedule. Subject to receipt of all approvals, permitting and financing, construction of Mount Peake could commence in 2016 with potential first production in early 2018, when independent commodity forecasts indicate that the price of V2O5 is expected to be substantially higher than current prices.

In parallel, the Company is also moving forward with discussions on off-take agreements for the remainder of its vanadium production, which includes, but is not limited to, vanadium redox battery grade products, and for its Titanium Pigment and Pig-Iron products, and on a number of key aspects of the Mount Peake project, including the process for mine and development permitting and approvals.

TNG is also currently in initial discussions with parties interested in providing financing for the Mount Peake Project. WOOJIN and other Korean and international groups are currently reviewing both pre-production finance to and investment in, TNG or the Mount Peake Project.

MOU with Caterpillar Financial for Project and Equipment Finance for Mount Peake

Subsequent to the end of the reporting period, TNG signed a Memorandum of Understanding (MOU) with Caterpillar Financial Australia Limited ('Cat Financial') to consider the provision of project and/or equipment finance, for the development of the Mount Peake Project, subject to due diligence, approvals, agreed terms and documentation.

The MOU marks another important step in TNG's multi-pronged strategy to establish a diversified funding consortium for the Mount Peake Project and follows the the completion of the Mount Peake Definitive Feasibility Study (DFS) in July, and the recent signing of the Company's first-ever binding off-take agreement for vanadium products.

The key terms of the non-binding MOU with Cat Financial:

• Cat Financial has agreed to consider the provision of project finance and/or equipment finance for the Mount Peake Vanadium-Titanium-Iron Project for the purpose of funding the development of the project in conjunction with other relevant project financiers;

• TNG has agreed to consider the procurement of Cat® mobile mining equipment for the Project and awarding the supply contract to Caterpillar's dealership in the Northern Territory, Hastings Deering (Australia) Ltd,;

• TNG has also agreed to consider the procurement of Cat power equipment for the project and awarding the supply contract to Caterpillar's equipment dealership in the Northern Territory, Energy Power Systems Australia.

It is envisaged that the MOU with Cat Financial, once converted into a binding agreement, will form part of the diversified project finance consortium being assembled to fund the Mount Peake Project. The supply of mobile mining and power equipment represents a significant component of the overall capital cost for development of the project.