TIVAN LIMITED — Capital/Financing Update 2011

Nov 22, 2011

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ASX ANASX ANNOUNCEMENT OUNCEMENT

ASX CODE: TNG ASX CODE: TNG

REGISTERED OFREGISTERED O F ICE FICE TNG Limited TNG Limited Level 1, 282 Rokeby Road Level 1, 282 Rokeby Road Subiaco, Western Australia 6008 Subiaco, Western Australia 6008

T +61 8 9327 0900 T +61 8 9327 0900 F +61 8 9327 0901 F +61 8 9327 0901

W wW ww w.tngltd.com.au .tngltd.com.au E corporate@tngltd.com.au E corporate@tngltd.com.au

ABN 12 000 817 023 ABN 12 000 817 023

STRONG PRE-FEASIBILITY STUDY RESULTS SUPPORT MOUNT PEAKE DEVELOPMENT POTENTIAL

ROBUST CASH FLOWS, POSITIVE RETURNS PLUS RECENT CHINESE INVESTMENT PROVIDE COMPETITIVE ADVANTAGE FOR DEVELOPMENT

Highlights:

• Interim Pre-Feasibility Study (PFS) results demonstrate excellent returns from development of the Mount Peake Iron-VanadiumTitanium Project (NT), including:

• Pre-tax Nett annual cash flow of $151.3M

• Life of mine revenues of $10.4B

• Pre-tax IRR of 25.7%

• Initial 17.2-year mine life

DIRECTORS DIRECTORS Neil Biddle Neil Biddle Paul Burton Paul Burton Stuart Crow Stuart Crow

COMPANY SECRETARY COMPANY SECRETARY Simon Robertson Simon Robertson

PROJECTS PROJECTS Mount Peake: Fe-V-Ti Mount Peake: Fe-V-Ti Manbarrum: Zn-Pb-Ag Manbarrum: Zn-Pb-Ag East Rover: Cu-Au East Rover: Cu-Au McArthur: Cu McArthur: Cu

CONTACT DETAILS CONTACT DETAILS Paul Burton | +61 8 9327 0900 Paul Burton | +61 8 9327 0900 Nicholas Read | +61 419 929 046 Nicholas Read | +61 419 929 046 Simon Robertson | +61 8 9327 0900Simon Robertson | +61 8 9327 0900

• 2.5Mtpa operation expanding to 5Mtpa after 4 years

• o Average annual production of 14,200tpa V2O5, 379,000tpa TiO2 and 1.2Mt Fe

• Total pre-production capital cost estimate of A$476M

• o TIVAN[TM] Process remains cheaper than standard process.

• Final PFS report to be delivered in Q1 2012 following completion of optimization and commercialization of the TIVAN™ hydrometallurgical process.

• Product recoveries and purities expected to increase with completion of optimization work.

• Potential to value – add by downstream processing to produce higher-value Ferrovanadium (FeV) and Titanium products

• Recent Chinese partnership with ECE brings additional competitive advantage in ability to access finance, EPCM and final product end-users.

Australian resources company TNG Limited (ASX: TNG ) is pleased to report positive interim results from the Pre-Feasibility Study (“PFS”) on its 100%-owned Mount Peake Iron-Vanadium Project in the Northern Territory, outlining a project capable of generating revenues of $10.4 billion and operating cash flows of $3.2 billion over an initial 17.2-year life .

The Study - which is being prepared with input from key consulting companies Snowden Mining Industry Consultants Pty Ltd (“Snowden”), Mineral Engineering Technical Services (“METS”) and Sinclair Knight Mertz (“SKM”) - in our opinion provides strong commercial support to progress the Mount Peake Project to a Definitive Feasibility Study (DFS) early next year.

The DFS is planned to commence in Q1 of 2012 following successful completion of the current final metallurgical optimization test work leading to the pilot plant phase and commercialization of the new TIVAN™ hydrometallurgical process which underpins the project. The process successfully extracts commercial high-grade quantities of vanadium, titanium and iron from the Mount Peake mineralisation.

The positive PFS results follow the recent signing of an agreement with the Jiangsu East China Mineral Investment & Development Bureau (“ECE”) on 8 November, formalizing a $13.4 million investment and strategic partnership in TNG. This will provide the Company with significant competitive advantages in the future development of Mount Peake – including potential access to Chinese finance, EPCM and final product end-users.

Pre-Feasibility Study Results:

The Pre-Feasibility Study (PFS) is based on the updated JORC Indicated and Inferred Resource for Mount Peake published on 12 October 2011 of 160Mt @ 0.3% V2O5, 5% TiO2 and 23% Fe (Indicated 110Mt @ 0.29% V2O5, 5.3% TiO2 and 23% Fe; Inferred 48Mt @ 0.24% V2O5, 4.5% TiO2 and 21% Fe) . In addition to this resource, TNG has published an Exploration Target[1] of 500-700Mt grading 0.2-0.4% V2O5 and 25-35% Fe.

The Interim PFS results have been independently prepared by METS (process and infrastructure design and related capital and operating costs), Snowden (mine design, mining costs and financial analysis) and SKM (transport costs) to an accuracy level of ±25 per cent, which is typical for a PFS and provides a strong platform to progress to a Definitive Feasibility Study (“DFS”) decision:

1 The potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.

The key points of the Interim PFS are:

• Total material mined: 147.9Mt

• Total waste movement: 72Mt  Total ore mined: 75.9Mt  Strip ratio: 0.95  Mine life: 17.2 years  Processing rate (life-of-mine): 2.5Mt/annum, increasing to 5Mt/annum in year 4  Average head grade: 0.39% V2O5, 27.09% Fe, 7.02% TiO2  Average recoveries: 80% V2O5, 66% Fe, 67% TiO2  Total metal production: 245kt V2O5, 20,246kt Fe, 6,495kt TiO2

The key financial outcomes of the Interim PFS are:

• Total revenue (life-of-mine): A$10.4 billion

• Surplus operating cash flow (life-of-mine): A$3.2 billion  Nett cash flow (life-of-mine): A$2.6 billion  Pre-production capital cost estimate: A$479 million

• Total operating costs (including mining, processing, transport & royalties): A$90.4/tonne of plant feed

• Nett annual cash flow:

• IRR pre-tax:

A$151.3M[2] 25.7%

2Nett annual Cash Flow is defined as the average discounted cash flow per annum after all CAPEX (pre-strip CAPEX, initial CAPEX, and expansion CAPEX) has been deducted, but ignores cost or source of capital, hedging, tax, depreciation, rehabilitation and salvage.

Key assumptions include:

• Operating costs and pit slope angles related to mining estimated to a Pre-Feasibility Study level (±25%)

• V2O5 price of US$20,305/tonne (>80% grade)

• TiO2 price of US$400/tonne (> 67% grade)

• Fe2O3 price of US$200/tonne (>66% grade)

• Royalty rate of 2.5% per tonne of plant feed

• Discount rate of 8%

• A$/US$ exchange rate of 0.85 US$ = 1A$

Pricing:

Product pricing was supplied by an Independent Commodities Analyst based on all available forecasts, price trends and previous averages for each commodity, and is subject to final test work results.

Base case product markets were used for all commodities. Specialized markets such as Iron-pigment (paint), where prices exceed US$500/tonne for high purity Fe2O3, have not been included at this stage but will be identified and quantified in future studies. These provide potential significant upside to base case pricing.

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Exchange Rate:

An exchange rate of 0.85 US$ was used as this remains the medium-term forecast from major Australian banks.

However, as a comparison TNG also commissioned Snowden to run the financial analysis with the same parameters using a 0.95 US$ exchange rate. The results of this study still provide the Project with Nett annual cash flow of $89.4 million and an IRR of 17.6%, indicating that the Project remains robust but clearly sensitive to price and exchange rate fluctuations.

Capital Cost (CAPEX):

The details of the estimated capital expenditure are shown in Appendix 1.

Process Plant - Process plant direct costs of $365 million are comparable to the previously reported Scoping Study figures. The capital cost required to expand the plant from 2.5Mtpa to 5Mtpa has been estimated at A$151.8 million which would be incurred in year 4.

Infrastructure and other fixed assets – The pre-production capital cost estimate of A$78 million is based on detailed estimates for roads, power, accommodation and onsite buildings. The costs to expand to 5Mtpa have been estimated at $14 million.

These costs were not included in the previous Scoping Study and account for the increase in the overall CAPEX when comparing the two studies.

The Company recognizes that a decision to expand to a 5Mtpa operation would be a future commercial decision based on prevailing market conditions. It is anticipated that expansion would be funded partially by cash flow from operations.

Operating Costs (OPEX):

A breakdown of total operating cost estimates is provided in Appendix 2. The total operating cost per tonne of material is estimated at $90/tonne and includes total mining, processing and transport costs.

Process costs - Processing costs have increased from $46/tonne to $60/tonne when compared to the Scoping Study. These increases are based on definitive cost increases for the processing reagents in the hydrometallurgical process. Despite these increases the process still remains approximately 40% cheaper than the standard pyrometalurgical process cost (which only produces one product).

Transport costs - Product transportation cost estimates have increased from $19/tonne to $27/tonne of ore based on preliminary cost estimates sourced by SKM from infrastructure-providers.

The PFS has considered that final products of commercial grades would be trucked to a railhead and then railed to Darwin (approximately 1,180km) for shipping. Positive discussions have been held with all key infrastructure groups, indicative pricing obtained and confirmation received that appropriate infrastructure solutions can be put in place for all aspects of the Project.

The proximity to key infrastructure facilities of gas power, heavy duty roads, and rail provides the Mount Peake Project with a significant advantage.

Mining Costs - Mining costs supplied by Snowden have increased marginally by 4% due to changes in strip ratio and are comparable to existing operations.

Mine Life:

The process life of mine has reduced from 20 years to 17 years due to higher throughput at the 5tpa production rate and mining of higher grade material in first years.

The next stage:

Metallurgical test work carried out by TNG and METS has shown that the magnetic concentrate that would be produced from Mount Peake material is amenable to the TIVAN[TM ] hydrometallurgical processing, resulting in high recoveries and grades of vanadium pentoxide (96.7% purity), titanium dioxide (55%) and iron oxide (66%) in the acid leaching and recovery process. Recoveries of product grades and the final purity of titanium dioxide is expected to increase as optimization work is completed.

Further optimization and test work is ongoing to up-scale to a commercial operating plant. This work is planned to be completed over the next few months leading to the pilot plant phase and commercialization process for the TIVAN™ process.

TNG Limited | ASX Announcement

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The final results of this work are expected to be released during the first Quarter of 2012, paving the way for a final DFS decision.

Importantly the DFS will also consider in more detail commercial options for value-add downstream processing to produce a high-value ferro-vanadium product, (which indicated the potential to add a further $80 million to the Nett Annual Cash in the supplementary Scoping Study completed earlier this year), and to produce upgraded higher value Titanium products which could also significantly enhance forecast cash flows.

Commenting on the results, TNG‟s Managing Director Mr Paul Burton said: “These are very positive interim results, building on our initial Scoping Study at the start of the year. The Pre-Feasibility Study, which is now at an advanced stage, has outlined a robust project capable of generating life-of-mine revenues of more than $10 billion and annual Nett cash flows of over A$150 million over a mine life of more than 17 years”.

“Subject to receiving final results from the commercialization of our TIVAN™ hydrometallurgical process, we expect to present a final decision to move directly to a Definitive Feasibility Study,” Mr Burton added.

“Importantly, we have now significantly de-risked the project after upgrading the JORC resource estimate inventory to more than 70 per cent in the Indicated category, and moving from a Scoping Study accuracy of +-50% to a Pre-Feasibility Study of +-25% accuracy, and securing a high quality Chinese partner in ECE to continue the support and development of this project”

“In addition once we complete the transaction with ECE next month, we will have two experienced Chinese executives on our Board. We believe this will provide us an additional significant competitive advantage in being able to access a range of development options in China, as well as providing access to finance, engineering, procurement and construction expertise and the ability to secure off-take agreements with key Chinese and other end-users,” he continued. “This will put us in a very strong position as we move into the Definitive Feasibility Study phase.”

“The Mount Peake Project continues to provide TNG with the opportunity to develop a world-class ferrous and strategic metals business in the Northern Territory,” Mr Burton said.

“While global financial markets remain very uncertain, demand for vanadium and titanium is forecast to increase significantly as a result of rapidly expanding markets for both these products.”

TNG LIMITED

Paul E Burton Managing Director 23 November 2011

TNG Limited | ASX Announcement

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COMPETENT PERSON STATEMENT

The information in this report that relates to Exploration Results is based on information compiled by Paul Burton, B.Sc, M.Sc, is also a Member of The Australasian Institute of Mining and Metallurgy , and an employee and Director of TNG Limited. Mr Burton has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves‟. Mr Burton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Mr Damian Connelly, MAAusIMM, Chartered Processional (MET), MMICA, MSME, MSAIMM was responsible for the preparation of the metallurgical test work results reported herein. Mr Connelly has sufficient experience to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of the Exploration Results, Mineral Resources and Ore Reserves. Mr Connelly consents to the inclusion in the report of the matters based on his information in the form and context in which is appears.

The information in this report that relates to Mineral Resources is based on information compiled by Lynn Olssen who is a Member of The Australasian Institute of Mining and Metallurgy and a full time employee of Snowden Mining Industry Consultants Pty Ltd. Lynn Olssen has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves‟. Lynn Olssen consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Financial and Mining analysis is based on information compiled by Jeremy Peters who is a Member of The Australasian Institute of Mining and Metallurgy and a full time employee of Snowden Mining Industry Consultants Pty Ltd. Jeremy Peters has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves‟. Jeremy Peters consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

DISCLAIMER

The Pre-Feasibility Study has been prepared based on the Company‟s presently delineated mineral resource estimate and any investment decision should be considered based on this information.

Enquiries:

Paul E Burton, Managing Director

• 61 (0) 8 9327 0900

Nicholas Read, Read Corporate + 61 (0) 419 929 046

TNG Limited | ASX Announcement

Appendix 1: Estimate of Capital costs supplied by METS include both Direct, Indirect and Infrastructure costs (+-25% accuracy)

			Totals Revised Total 2.5Mt/a	Totals Revised Total 5.0 Mt/a
Area		Plant throughout basis
100	CrushingCircuit		$28,671,591	$28,671,561
200	GrindingCircuit		$35,825,064	$35,825,064
300	Beneficiation & Leaching		$57,298,646	$79,160,587
400	Solvent Extraction		$16,754,261	$23,701,009
500	Vanadium Precipitation & Packaging		$13,190,986	$18,944,223
600	Acid Regeneration		$181,914,654	$261,256,571
700	Tailings Filtration		$24,238,940	$33,692,662
800	Reagents		$3,872,378	$5,169,422
900	Plant Utilities		$2,414,058	$3,305,699
		Direct Costs Totals	$364,180,578	$489,726,828
Field Indirects(China supply)		2.0%	$7,283,612	$9,794,567
EPCM(China supply)		4.0%	$14,567,223	$19,589,073
Vendor Reps		1.5%	$1,502,570	$1,863,847
Capital Spares		4.0%	$4,006,855	$4,970,260
CommissioningSpares		0.5%	$500,857	$621,282
First Fills			$2,200,000	$2,200,000
Insurance		3.0%	$3,005,141	$3,727,695
		Indirect Costs Total	$33,066,258	$42,766,694
	Infrastructure & Other Fixed Assets(Non-Factored Costs)
000	Road		$18,000,000	$18,000,000
000	Rail		$4,130,000	$4,130,000
000	Power Station		$22,519,750	$33,779,625
000	Water Supply		$797,805	$997,256.56
000	Buildings		$7,403,031	$7,403,031
000	Mobile Equipment		$8,898,255	$8,898,255
000	Accommodation Village		$15,587,137	$20,677,842
000	Laboratory		$1,584,767	$1,584,767
		Non-Factored Cost Total	$78,920,746	$95,470,777
		GRAND TOTALS	$476,167,581	$627,964,299

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Appendix 2: Total Operating Cost to accuracy of +-25%

Item	Unit	AUD
Mining
Waste	$/t	2.60
Ore	$/t	2.77
Grade Control on Ore	$/t	0.20
Administration	$/t	1.60
Total Mining Cost /t Ore	$/t	7.03
Total mining Cost / t Moved	$/t	3.61
Total Mining Cost	**$M **	533
Processing
Rehandle Stockpiles	$M	10.7
Labour	$/t	7.75
Power	$/t	10.43
Consumables	$/t	1.35
Maintenance	$/t	4.39
Reagents at 2.5 Mtpa	$/t	34.96
Reagents at 5.0 Mtpa	$/t	31.99
Administration	$/t	1.12
Average Cost / t Processed Years 1 to 4	$/t	60.20
Average Cost /t Processed Years 5 onwards	$/t	57.16
Total Processing Cost	$M	4,370
Product Transport
V2O5	$/t	138.26
TiO2	$/t	65.90
Fe2O3	$/t	65.90
Total Transport Cost /tonne Concentrate	$/t	77.45
Total Transport Cost / tonne Ore	$/t	25.79
Total Concentrate Transport Cost	$M	1,958
Total Operating Cost / tonne Ore	$/t	90.38
Total Operating Cost	**$M **	6,8614

TNG Limited | ASX Announcement