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Tiger Resources Draws Down $50M Facility From Gerald Metals, To Advance SXEW Copper Plant

Tiger Resources (ASX: TGS) is set to advance construction of the solvent-extraction and electro-winning (SXEW) plant at its Kipoi Copper Project in the Democratic Republic of Congo, following drawing down on a $50 million advance payment facility from Gerald Metals SA.

The $50 million advance payment is part of an agreement between Gerald and Tiger's 60% subsidiary, Société d'Exploitation de Kipoi SPRL (SEK), the operator at Kipoi.

SEK and Gerald also have an off-take agreement for 100,000 tonnes of copper cathode from the SXEW plant, which is nearing the final stages of construction and is on schedule for first copper cathode production in the second quarter of 2014.

Tiger plans to produce 25,000 tonnes of copper cathode in the first full 12 months of production at the SXEW plant and increase production to 50,000 tonnes in the next 12-month period.

Brad Marwood, managing director for Tiger, commented: "We are pleased to have drawn down this funding arrangement with Gerald Metals SA, as it will assist in funding the final stages of construction of the SXEW plant.

"The agreement with Gerald was completed in an extremely challenging climate and shows the robustness of the Kipoi Project, the confidence in the DRC and the strength of our management team.

The Kipoi project covers 55 square kilometres and is located 75 kilometres north-north-west of the city of Lubumbashi in the Katanga Province.

The project contains a 12 kilometre sequence of mineralised Roan sediments that host at least five known deposits: Kipoi Central, Kipoi North, Kileba, Judeira and Kaminafitwe.

Off-take agreement

The off-take agreement with Gerald is for 2,000 tonnes per month of cathodes to be delivered during the initial Phase 1 SXEW operations, increasing to 2,500 tonnes per month after the proposed expansion to 50,000 tonnes per annum capacity.

In addition to the SXEW plant, Tiger plans to produce 39,000 tonnes of copper in concentrate from the heavy media separation (HMS) plant at Kipoi in 2014 at an average operating cost of $0.30/lb of copper produced.

Stage 2 copper cathode

Construction of the Stage 2 SXEW plant commenced in January 2013 and is on schedule for first production of copper cathode in the second quarter of 2014.

The Feasibility Study for Stage 2 has confirmed the operation as a low-cost, high-margin project capable of producing 376,600 tonnes of copper cathode over nine years, processing ore reserves from the Kipoi Central, Kileba and Kipoi North deposits and reject floats, slimes and medium grade ore stockpiles from the Stage 1 HMS operation.

The Stage 2 site cash operating costs are forecast at $0.72/lb for the first two years of the operation (no mining required), increasing thereafter to produce a life of mine (LOM) average of $1.13/lb and with a LOM average C3 cost (all-in cost) of less than US$1.50/lb.

It is envisaged that ore from Judeira and other deposits within the Kipoi Project area, as well as the Lupoto Project, will also be processed during the Stage 2 operations, providing additional returns and increasing the mineral resources available as feedstock to the Stage 2 SXEW plant.

Increased resources will potentially increase the nine-year mine life demonstrated in the feasibility study and/or annual plant throughput.

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