Subiaco-based explorer TNG has flagged a potential financing and construction deal with South Korean steel giant POSCO for its Mount Peake vanadium project.
TNG told the market it has signed a three-way non-binding memorandum of understanding with POSCO and metallurgical consulstants Mineral Engineering Technical Services.
It says there is potential under the agreement for POSCO to assist TNG in obtaining project finance via Korean credit agencies and banks, and for POSCO to construct and develop the Mount Peake project .
There is also potential for the parties to enter into binding agreements for completion of a feasibility study at Mount Peake and short to long-term project development requirements.
POSCO holds a 12.5 per cent interest in the massive Roy Hill iron ore mine in the Pilbara and is reported to have tipped more than $1 billion into the project as collateral.
The deal follows TNG earlier this year signing a strategic agreement with Korean ferrovanadium produer WOOJIN, a major supplier to POSCO and other major steel manufacturers.
The arrangement with POSCO remains non-exclusive at this stage, and TNG managing director Paul Burton said he did not rule out the possibility of involving other global commodity partners.
Mr Burton said the company had demonstrated its ability to attract blue-chip strategic partners to the project.
"We are very pleased to have the involvement of one of the world's largest and most successful diversified steel, resource development and construction conglomerates in the development of the Mount Peake project," he said.
"This represents a great strategic fit for all parties and complements our existing relationship with WOOJIN under the strategic agreement announced in March."
TNG shares rose 9 per cent higher to 12 cents at 10:36am WST.
