Tiger Resources Ltd (TGS.ASX; $0.25/sh; Mkt Cap $170m) – Continuing to perform operationally and funding/offtake solution expected in near term. BUY PT $0.55/sh.
•TGS yesterday released an operational update on Stage 1 and development update on Stage 2 for the flagship Kipoi Copper Project in the DRC, Africa.
•The HMS plant continues to produce concentrate above guidance in respect of both grades and recoveries. Moreover, the plant is working at ~200% of the 900ktpa plant nameplate. Operating costs continue to remain below US$0.50/lb and the company is predicting ~40kt of Cu in conc production for the next 10 months. Previously released 2013 production guidance is 41-43ktpa Cu (FSBe 41kt) in concentrate at cash costs of US$0.48/lb.
•Development of Stage 2 commenced in January 2013 and remains on track to be commissioned in mid 2014. The heap leach pads are finished with placement of plastic liners imminent. The budget of ~$150m for the first phase of Stage 2 (25ktpa cathode) remains on budget.
•We understand that discussions have significantly progressed with international trading houses in respect of offtake finance to support Stage 2 development. This provides the potential for an imminent catalyst as it would remove funding uncertainty.
•BUY retained with PT of $0.55/sh.
TGS Price at posting:
26.0¢ Sentiment: None Disclosure: Not Held
