Tiger overshoots FY guidance to deliver 26 151 t in 2015

JOHANNESBURG (miningweekly.com) – ASX-listed Tiger Resources has overshot its 2015 production guidance by 5% to deliver 26 151 t of copper, benefiting from a consistent performance from its Democratic Republic of Congo-based Kipoi project.

A record 345 001 t of ore was stacked during the fourth quarter as part of Kipoi’s management plan to overstack in the final three months to mitigate against any high rainfall events that could impact on cathode production during the upcoming wet season.

The average grade of material stacked was 4.18% total copper, with a reported acid-soluble copper (AsCu) grade of 2.54% copper.

The lower average AsCu grade reflected the blend of ores stacked, the bulk of which comprised high sulphur oxide material and the balance being heavy melting scrap floats and medium-low grade run-of-mine stockpiles, Tiger said in a results statement.

Cash operating costs for the year were $1.42/lb, narrowing to $1.29/lb in the final quarter.

“Processing costs during the quarter were favourably impacted by the step-change in grid power, with 63% of Kipoi’s power requirements supplied by grid power, as opposed to 18% in the third quarter, and a continued focus to reduce both the price and consumption of sulphuric acid.

“The additional costs associated with the overstacking of ore in the quarter of $0.17/lb were capitalised to copper-in-circuit inventory and will be expensed to unit cash production costs on transfer of the copper in heaps and solution to refined cathode,” said the miner.

General and administrative unit cash costs were $0.15/lb higher in the fourth quarter than the prior quarter, owing to the reduction in copper production volumes, increasing fixed unit costs and a site-based fringe benefit tax assessment.

The construction and preparation of heap leach pads five and six during the quarter were the main contributors to the sustaining capital expenditure (capex) of $0.09/lb, or $1.9-million.

Tiger sold 26 091 t of copper cathode over the 12 months, with 5 972 t sold in the final quarter at a realised average copper price of $4 878/t, inclusive of quotational period (QP) pricing adjustments.

QP pricing was fixed for all copper cathode delivered during the quarter, with no pricing exposure remaining for copper cathode sold up to December 31.

By the end of the year, Tiger had forward-sold 1 000 t of January 2016 cathode sales at $4 625/t.

Meanwhile, over the final three months, Tiger executed letters of intent (LoIs) with the principal contractor for the electrowinning and tank leach expansion projects at Kipoi, which formed part of the debottlenecking initiative to increase the capacity of the plant to 32 500 t/y.

“The LoIs were placed within the capex estimate of $25-million in the engineering and costing study,” it noted.

The results of a ground gravity survey over the Kipoi concessions were also received in the final quarter, with several previously untested areas identified in the conceptual target zones within the Kileba–Kipoi Central-Judeira deposit corridor.

In addition, the induced polarisation survey was completed to assist sterilisation and mine planning activities, with this survey confirming no evidence of favourable copper horizon lithologies.

Total expenditure on exploration activities at the Kipoi and Lupoto projects during the quarter was $500 000.

Turning to corporate matters, Tiger in December entered into a binding agreement with Taurus Mining Finance Fund and the International Finance Corporation (IFC) for a $162.5-million secured finance facility for the refinancing and expansion of Kipoi.

The facility refinanced the existing secured debt facilities with Taurus and Gerald Metals South Africa and provided the required expansion capital for the debottlenecking initiative to increase the capacity of the Kipoi plant.

The facility outlined a 99-month term to January 2024 and an interest-only period to January 31, 2017.

The first drawdown under the facility was on schedule to be completed at the end of January.

Tiger announced a further equity capital raising of about $25-million, comprising a placement to Resource Capital Funds (RCF) and a nonrenounceable accelerated entitlement offer to eligible institutional and retail shareholders, with RCF and IFC agreeing to subscribe for shortfall shares.
The institutional entitlement offer, together with the $6-million placement to RCF completed on December 17, raised gross proceeds of $13-million by the end of the December quarter.

Some $3.5-million was raised from the retail offer subscriptions and a further $1.57-million was raised from placement of shortfall to RCF.

This had brought ordinary shares on issue to 1.64-million.

Upon completion of IFC's $5-million share subscription, Tiger would have raised gross proceeds of $23-million from the equity raisings.