ABN 12 000 817 023

2016 ANNUAL REPORT

DIRECTORS

Paul Burton (Managing Director) Geoffrey Crow (Non-Executive Director) Rex Turkington (Non-Executive Director)

COMPANY SECRETARY

Simon Robertson

REGISTERED OFFICE

Level 1, 282 Rokeby Road Subiaco Western Australia 6008

PO Box 1126

Subiaco Western Australia 6904

Telephone: (08) 9327 0900

Facsimile: (08) 9327 0901 Website: www.tngltd.com.au

SHARE REGISTRY

Computershare Investor Services Pty Ltd Level 2, 45 St Georges Terrace

Perth Western Australia 6000

Telephone: (08) 9323 2000

Facsimile: (08) 9323 2033

AUDITORS

KPMG

235 St Georges Terrace

Perth Western Australia 6000

DOMESTIC STOCK EXCHANGE

Australian Securities Exchange (ASX) Code: TNG

INTERNATIONAL STOCK EXCHANGE

German Stock Exchanges Code: HJI

CONTENTS

Review of Operations 2

Directors' Report 19

Auditor's Independence Declaration 31

Financial Statements 32

Consolidated Statement of Comprehensive Income 32

Consolidated Statement of Financial Position 33

Consolidated Statement of Cash Flows 34

Consolidated Statement of Changes in Equity 35

Notes to the Financial Statements 36

Directors' Declaration 66

Independent Audit Report 67

Corporate Governance Statement 69

Additional ASX Information 77

ANNUAL REPORT 2016 1

REVIEW OF OPERATIONS

2016 HIGHLIGHTS - YEAR IN REVIEW

X Binding Life-of-Mine Off-take Agreement signed with major Korean ferro-vanadium group, WOOJIN, for

a minimum of 60% of all vanadium products to be produced from the Mount Peake Project.

X Binding Life-of-Mine Technology Transfer agreement signed with WOOJIN ("WJN") for the use of WJN's proprietary ferro-vanadium production technology at the TIVAN® refinery site. WOOJIN's technology

currently has the world's highest vanadium recovery rate and is expected to allow TNG significant additional profitability over the project's life.

X Binding Term Sheet for Life-of-Mine off-take signed with major global commodity trader Gunvor

(Singapore) for a minimum of 60% of all iron products to be produced from Mount Peake.

X Binding Heads of Agreement signed with SMS group, one of world's biggest metallurgical engineering and construction companies, for engineering, design and tendering for construction for the TIVAN® downstream refinery, and provision of assistance for funding refinery construction.

X Memorandum of Understanding with SMS group for the joint commercial exploitation of the technology underpinning the TIVAN® downstream refinery.

X Up to $50 million per annum in operating cost savings identified for the Mount Peake Project as a result of work completed under the strategic alliance between TNG and SMS group.

X Multi-pronged Memorandum of Understanding (MOU) signed with the leading global services provider Downer EDI, paving the way to secure

Downer's participation in the development, construction and operation of the Mount Peake Project.

X Memorandum of Understanding signed 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.

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

X Strong progress with Mount Peake approvals, with the Environmental Impact Statement (EIS) released for public comment, Notice of Intent for TNG's Darwin refinery submitted to the Northern Territory Government, and Sacred Site Clearance Certificate received from the Central Land Council.

X Discussions continued on multiple fronts during the period with several leading financial groups and major construction and mining groups to secure an appropriate funding and development package for Mount Peake.

X Completion of $4 million capital raising, under which SMS group GmbH became a cornerstone investor in TNG, with a further $4 million raised via the conversion of options by existing shareholders.

2 TNG LIMITED