ASX ANNOUNCEMENT

June 2016 Quarterly Activities Report

14 July 2016

Global engineering giant SMS Group confirms strong continued support for TNG with direct equity investment and pivotal MOU for joint technology exchange; Development activities at Mount Peake progressing with water bore drilling underway and the company expands its base metal portfolio in NT.

HIGHLIGHTS

MOUNT PEAKE VANADIUM-TITANIUM-IRON PROJECT (NT)

• Memorandum of Understanding signed with SMS group GmbH, one of the world's biggest metallurgical engineering and construction companies, for the joint commercial exploitation of the technology underpinning the TIVAN™ downstream refinery.

• Water bore drill testwork commenced at Mount Peake as part of mine development requirements. The specialist drilling has been designed to provide additional information for the bore field modelling included in the Feasibility Study following the discovery of the aquifer by TNG last year.

• Results from water bore drilling will form a part of the Supplement Report for the Environmental Impact Study (EIS) for the Mount Peake development, to be submitted later this year.

• Detailed pre-engineering works progressing on several fronts with further updates expected shortly.

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

• Sharp rise in US ferro-vanadium prices since the start of the year reflects growing tightness in the market and falling inventories, according to analysis by Metal Bulletin.

  BASE METAL PROJECTS

  • Mapping and geochemical sampling at the McArthur River Copper Zinc Project in the Northern Territory has extended the strike length of the highly prospective Wollogorang Formation by 8km.

  • Acquisition of new, highly-prospective zinc project in the Northern Territory for inclusion in the Company's planned spin-off of non-core exploration assets.

  CORPORATE

• Completion of $4 million capital raising, under which SMS group GmbH became a cornerstone investor in TNG. SMS group, via its subsidiary SMS Investments, subscribed for $1.5M or 14M shares, while overseas institutions subscribed for the balance.

• New broker reports issued on TNG by UK broker Hardman & Co and Australian equities research group Breakaway Research.

• Appeals relating to long-running Davis Samuel judgement dismissed in favour of TNG and the Commonwealth, marking an end to the Company's involvement in the proceedings.

• Cash reserves of $7.1M at Quarter-end, providing a strong foundation for ongoing pre-development activities.

SUMMARY

TNG continued to make strong progress on a number of fronts during the June Quarter with pre-development and financing activities for the world-class Mount Peake Vanadium-Titanium-Iron Project in the Northern Territory. A key highlight during the Quarter was the signing of important agreements with the global engineering giant, SMS group GmbH, further cementing TNG's strong relationship with this key development partner.

A pivotal Memorandum of Understanding (MOU) was signed with SMS group to facilitate a joint technology exchange for the commercial development of a TIVAN™ refinery in Darwin. This crucial MOU will see the companies join forces to commercialise

the technology underpinning the TIVAN™ downstream refinery and investigate opportunities to grant each other access to their respective intellectual property.

In addition, SMS group has become a cornerstone shareholder in TNG following its participation in the Company's successful

$4 million capital raising.

These latest agreements represent a substantial vote of confidence by SMS group in the potential of the TIVAN™ Process, the quality of the Mount Peake Project and in TNG's ability to secure financing on attractive terms. SMS group played a key role in the completion of the Mount Peake feasibility study - including the completion of metallurgical test work, flowsheet verification and financial modelling - and TNG is delighted to have now cemented their participation in the Company's finance and development consortium for Mount Peake.

SMS group is one of the largest users of the German-based Export Credit Agency scheme, and its close involvement in the project gives TNG the opportunity to access this highly attractive financing option for the project.

At Mount Peake, pre-development activities are continuing, with a new program of water bore drilling commencing during the Quarter. This work will provide additional information required for groundwater modelling and for the Environmental Impact Statement (EIS) report submitted to the Northern Territory EPA in December last year. Detailed pre-engineering works are also progressing on several fronts, with further updates expected over the September Quarter.

The June Quarter also saw further strong increases in the US ferro-vanadium price, which is currently sitting at a more than 14•month high. An article published in Metal Bulletin Magazine on 6 July 2016 said spot prices have risen by an average of 85.3% since the start of this year. Supply concerns have been exacerbated by an ongoing US anti•dumping investigation into imports of ferro-vanadium from South Korea, and traders' inventories continue to dwindle.

Outside of the Mount Peake Project, during the Quarter the Company conducted a mapping and geochemical sampling program at the McArthur River Project in the Northern Territory, which successfully extended the strike length of the copper- zinc-lead anomaly to 25km. In addition, TNG also acquired a new zinc and precious metals exploration project in the highly prospective Warumpi Province to the west of Alice Springs. The acquisition is consistent with the continued broader development of TNG's resource portfolio, with the new project to be included in the proposed spin-off of the Company's exploration assets via its subsidiary Todd River Resources.

On the corporate front, TNG completed a highly successful $4 million capital raising, which brought SMS group onto the Company's share register as a major shareholder with a 2 per cent stake. The proceeds from this raising will strengthen the Company's balance sheet as it progresses financing discussions and advances pre-development activities at Mount Peake, including completing final permitting and off-take arrangements. TNG had cash reserves of $7.1 million at Quarter-end.

PROJECTS

VANADIUM-TITANIUM-IRON

Mount Peake Project: TNG 100%

The Mount Peake Project is 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.

Memorandum of Understanding with SMS Group for Joint Technology Exchange

During the Quarter, TNG took another major step towards the financing and development of the Mount Peake Project after signing a crucial Memorandum of Understanding (MOU) with global engineering giant, SMS group GmbH, which will see the companies join forces to commercialise the technology underpinning the TIVAN™ downstream refinery and investigate opportunities to grant each other access to their respective intellectual property.

The signing of the MOU, which builds on a binding Heads of Agreement signed earlier this year for the engineering, design and construction of the TIVAN™ refinery in Darwin, represents a major vote of confidence by one of world's largest metallurgical

engineering and construction companies in the future of the Mount Peake Project - and cements SMS group's participation as part of the financing and development consortium.

SMS Group GmbH is of the leading global system suppliers of plants, machines and services along the entire metallurgical value chain, with a global workforce of approximately 13,000 employees. It has assisted with many aspects of the Mount Peake DFS including metallurgical test work, flowsheet verification, financial modelling and with the final compilation of the DFS report.

Under the MOU, the parties have confirmed their mutual intent to establish appropriate structures and/or contractual frameworks to ensure an alignment of their business interests in the future marketing of their combined IP and will work together to explore the best avenues to commercially exploit their IP. This could be via a cross-licensing agreement, a patent pool, patent pooling, a joint venture or any other arrangement deemed most suitable for balancing the respective rights and obligations.

Key elements of the MOU include:

• SMS group to grant TNG the right to use its TIVAN™ IP in TNG's wholly or majorly owned refineries for the processing of titanoferrous ores on the condition that those refineries are supplied by SMS;

• In the event that TNG elects to procure such a refinery from another vendor, SMS shall grant TNG a license to use its TIVAN™ IP against payment of an adequate royalty (to be discussed) in each case;

• TNG shall grant SMS as an equipment supplier and plant builder, as well as its respective customers the right to use TNG's TIVAN™ IP against payment of an adequate royalty (to be discussed) in each case;

• Any future inventions and or any other IP by the Parties applicable to the processing of titanoferrous ores based on a hydrochloric acid or ferric chloride leach shall be disclosed to each other and licensed under the conditions outlined above.

Representatives of SMS Group and TNG Ltd at the Mount Peake mine site

The MOU builds on the binding Heads of Agreement signed during the March 2016 Quarter under which SMS agreed to undertake full due diligence on the relevant detailed technological and technical aspects of the Mount Peake DFS relating to

the TIVAN™ refinery; upon final validation provide engineering and design for tender of the refinery construction as well as firm equipment cost; and provide assistance for arranging the funding and the construction of the TIVAN™ refinery which may include an Export Credit Agency backed financing or other structured finance tools.

Detailed Water Bore Drilling with Production Wells Underway for Mine Development Planning

A new program of water bore drilling commenced at Mount Peake at the end of the reporting period.

The water bore drilling and evaluation program will provide additional information required for the groundwater modelling work conducted during 2015, which formed a part of the Definitive Feasibility Study completed in July 2015 (see ASX Announcement - 31 July 2015), and for the Environmental Impact Statement (EIS) report submitted to the Northern Territory EPA in December last year (see ASX Announcement - 11 February 2016).

The Mount Peake aquifer is located 20-35km to the north-east of the proposed Mount Peake mine site. A series of large diameter water-bore holes will be drilled in the paleochannel aquifer outlined by TNG's drilling in 2015 (see ASX Announcements - 23 February 2015 and 13 April 2015). In addition, two "production" bores will be established together with adjacent monitoring holes to establish the data required for mine planning by Snowden and Downer, which have been appointed by TNG to undertake pre-engineering works and development.

Detailed evaluation of the long-term sustainability of the aquifer is a normal requirement for long-life mine projects such as Mount Peake, which has an initial life-of-mine of 17 years.

GHD, TNG's appointed Environmental and Hydrological Consultants, will be involved in supervising the drilling works and pump testing of the aquifers intersected in the drilling, and will assess the sustainable yield of the aquifer system for the mine development. This will include water sampling for quality assessment, pump testing to evaluate sustainable yield utilising several types of pump tests including initial air lifting with the drill rig will be followed by 24-hour pump testing, and 14-day extended pumping of selected holes.

GHD will prepare an updated groundwater model and design of the operational bore field from which yield values will be obtained for the proposed bore field in order to establish the life-of-mine mining and ancillary water requirements for the whole operation.

Importantly, this work will also determine the exact amount of pumps, type and the power required for the life of mine operation which TNG will incorporate into its current investigations into the potential to utilise alternative power solutions for the mining operations, such as solar-powered vanadium redox batteries. It is highly likely that these can be used for the pumps, reducing operating costs and provide a green energy solution.

TIVAN™ Process

TIVAN™ pilot plant testwork completed with exceptional results

As outlined in the June 2015 Quarterly Report, the pilot metallurgical testwork program for the TIVAN® downstream refinery of the Mount Peake Project has been successfully completed, delivering excellent results which have either met or exceeded expectations in all areas.

The TIVAN™ testwork program was carried out at the world-class Commonwealth Scientific and Industrial Research Organisation (CSIRO) hydrometallurgical research facilities in Perth, with the appointed team of CSIRO experts providing significant input and improvements to the process before and during the trial.

The program confirmed the ability to achieve commercial vanadium recoveries of >93% and produce high-purity vanadium pentoxide (V2O5) of >99% purity, with high-purity iron oxide and titanium dioxide also recovered as valuable by-products. The programme also outlined several areas of future potential improvements which are being reviewed prior to final design.