TNG Limited has BUY and $0.27 short term target maintained by Old Park Lane Capital

TNG Limited (ASX: TNG) last traded at $0.09, with the broker Old Park Lane Capital maintaining a BUY recommendation and a short term price target of $0.27.
The following is an extract from the latest broker report released today.

ASX-listed TNG Limited (ASX: TNG) has commenced a new resource and in-fill drilling programme at its flagship Mount Peake vanadium-iron-titanium project in the Northern Territory of Australia, with the aim of upgrading the current JORC resource.
The 2,700m reverse circulation (“RC”) drill programme forms a critical part of the ongoing pre-feasibility study into Mount Peake which is due for completion in October 2011.
In addition, TNG is also testing two new geophysical targets that lie outside of the current resource envelope.

In-fill drilling commences
At present TNG has outlined an Inferred Resource of 139Mt, prepared in accordance with JORC guidelines.
The resource remains open along strike to the north and south. The extent of known mineralisation is 3,000m long and 500m wide from current drilling.
TNG will use the RC rig to test the geometry and variability of the deposit and to fill in the gaps from the earlier round of diamond drilling.

Resource update on the way
Once the RC drilling is complete, we would expect TNG to start work on upgrading the current inferred resource which will also benefit from the inclusion of data from the May/June diamond drilling programme.
It is worth pointing out that the results from the last round of diamond drilling returned intersections of continuous magnetite mineralisation with grades of up to 0.6% V2O5.
This, in our view alludes to the potential for an increase in both tonnage and grade for an updated resource estimate.

New targets
The forthcoming RC drilling programme will also test two extra geophysical targets which lie outside the current resource envelope.
The implication of intersecting additional magnetite-hosted vanadium mineralisation is clear.
These targets which lie within trucking distance of Mount Peake may represent potential satellite deposits and another source of ore for a future Mount Peake processing operation.

Key catalysts include
Completion of the pre-feasibility study (Oct 2011), pilot plant test results for the TIVAN™ process (late 2011), JORC update (Q4), news on infrastructure opportunities and exploration results.
We maintain our short-term target price of A$0.27 per share (fully diluted) and a BUY recommendation.
We believe there is material upside if TNG is successful in developing the project according to current plans and we have been highly conservative in our valuation.
We acknowledge that key news flow on metallurgical test-work or infrastructure may cause our target to be breached rapidly.

Originally published at http://www.proactiveinvestors.com.au/companies/news/17913/tng-limited-has-buy-and-027-short-term-target-maintained-by-old-park-lane-capital-17913.html