Metals company TNG is on track to sell its Melville Island exploration licence application (ELA) in the Northern Territory to Rio Tinto Exploration.
Both companies signed a farm-in agreement back in October 2012, allowing Rio to earn an 80 per cent interest in the project, while TNG retained 20 per cent.
However, since the license did not progress from the application phase, TNG instead agreed to sell its interest in the project to Rio for $80,000.
The ELA 28617 covers an area of 1387sqkm in the north-western part of Melville Island and is prospective for bauxite and heavy minerals.
TNG managing director Paul Burton said the Melville Island ELA was considered a non-core asset for the company and the divestment aligns with its focus on progressing the Mount Peake vanadium-titanium-iron project. Mount Peake, which is also in the NT, is expected to provide more than 1700 construction jobs and 600 ongoing jobs.
“Over the past 12 months, we have demonstrated a clear intent to rationalise our portfolio consistent with our focus as an emerging international strategic metals producer,” he said.
“A key step in this process was the successful demerger and IPO of our Northern Territory base metal exploration assets through Todd River Resources and this transaction with Rio Tinto Exploration marks another step towards consolidating our minerals portfolio while retaining some exposure to the future development potential of this asset.”