Tiger Resources (ASX:TGS) has achieved another key milestone with commercial copper cathode production declared at its 60%-owned Kipoi Copper Project in the Democratic Republic of Congo within six weeks of start-up.
The Stage 2 solvent extraction electro-winning (SXEW) plant produced 1,501 tonnes of copper cathode in July operating at 72% of nameplate design.
It is on target to reach its increased guidance of 14,000 tonnes of copper cathode in 2014.
Tiger had in July arranged a further $25 million advance payment facility from Gerald Metals SA, adding to the existing $50 million facility and had raised approximately $20 million through a placement of shares priced at $0.34 each in June.
This will provide working capital for mining operations and the SXEW plant.
Managing director Brad Marwood said achievement of commercial production within six weeks of start-up demonstrated the quality of the project and on-site team.
"We have a very good operating team and we are vigorously pursuing the next target of full design capacity of 2,083 tonnes per month of copper cathode," he added.
"It can often take more than six months to bring an SXEW plant to full production; I expect we will beat this target."
Tiger expects the plant to produce 14,000 tonnes of copper cathode this calendar year, and 25,000 tonnes of cathode in its first full 12 months of commercial production.
Kipoi Copper Project
Copper cathode production commenced on the 25 May at the Kipoi Copper Project, which is located about 75 kilometres north-northwest of Lubumbashi in the Katanga Province of the DRC.
The Stage 2 SXEW Plant is expected to produce 25,000 tonnes of copper cathode in its first 12 months of commercial production.
For the first three years of its operation, the plant will draw on stockpiles produced from its Stage 1 heavy media separation (HMS) plant. The Stage 1 operations have produced stockpiles with 159,600 tonnes of contained copper.
The forecasted SXEW life of mine (LOM) site cash operating cost is $1.04 per pound, and forecast LOM C3 cost (all-in cost, including capital expenditure) is US$1.75/lb.
It is envisaged that ore from Judeira and other deposits within the Kipoi Project area, and within the nearby 100%-owned Lupoto Project, will also be processed during the SXEW operations, providing additional returns and increasing the ore reserves available as feedstock to the SXEW plant.
Increased resources from these deposits will potentially increase the mine life and/or the annual plant throughput
The Feasibility Study for Stage 2 has confirmed the operation as a low-cost, high-margin project capable of producing 538,000 tonnes of copper cathode over 11 years.
Tiger had in July arranged a further $25 million advance payment facility from Gerald Metals SA, adding to the existing $50 million facility.
This is provided for working capital related to mining operations and the solvent-extraction and electro-winning plant at the Kipoi Copper Project.
Under the new agreement with Gerald, the total advance amount of $75 million is repayable by Tiger in 18 equal monthly instalments from January 2015 to June 2016.
Gerald has an off-take agreement for 175,000 tonnes of copper cathode, with 100% of cathode production from the SXEW plant committed until that tonnage has been delivered.
The company also raised about $20 million through a placement that will be used to implement discretionary early works capital expenditure for Phase II and Phase III of the planned SXEW expansion program.
This includes an upgrade to the power distribution network and site works for the installation of 30MVA electrical transformers, the early development of heap leach pads 2, 3 and 4, and the installation of a conveyor and stacker system which will replace the current 800 metres truck haulage requirement of ore to the heap leach operation.
These initiatives are expected to materially reduce unit operating costs in Phase I as well as facilitate the implementation of the Phase II and Phase III expansion.
That Tiger Resources has achieved commercial copper cathode production from its Kipoi Copper Project within six weeks of start-up is a very strong outcome and places the company well on the road to achieving production guidance of 14,000 tonnes of copper cathode in 2014.
The company is currently progressing work to achieve full design capacity of 2,083 tonnes per month of copper cathode.
Cash on hand and deposit at 30 June 2014 was $21.8 million along with trade receivables, copper cathode and copper concentrate inventory available for immediate delivery of $12.3 million.
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