no doubt on quality of tigers realm

Note the last paragraph of this article.

http://tigersrealmcoal.com/wp-content/uploads/2014/03/20142803-No-doubt-on-quality-of-Tigers-Realm-AFR-smartinvestor.pdf

Trevor Hoey is a senior writer for Financial Review Smart Investor. For the last 13 years he has
been uncovering quality small and mid cap stocks for The Australian Financial Review, Shares Magazine and
BRW. Trevor analyses breaking company news as it happens, giving active investors an important edge

Published 28 March 2014 11:26 smartinvestor


Coal miner Tigers Realm is in charge of one of the most promising emerging coal projects, located in the Bering Basin in eastern Russia.
As the Mines and Money event in Hong Kong 2014 drew to a close, conference-goers were given an interesting insight into the project by the group’s managing director, Craig
Parry.
After he addressed the conference, Parry outlined the company’s course to bringing its major coking coal project in Russia on stream. While this won’t happen overnight, there is no doubting the quality of the company’s Russian assets.

While Russia is not perceived as one of the friendliest jurisdictions in which to do business, Parry couldn’t be happier with the government support he and his company have received in permitting and granting of licences. This has been backed up by financial investment at a government and private equity level.

A $62.5 million capital raising by Tigers in December included $16.5 million from the Russia Direct Investment Fund. Prominent Russian private equity firm Baring Vostock Capital Partners also accounted for $52.5 million of the placement.
Further confidence in Tigers’ ability to bring what could be a 10 million tonnes a year project on stream is gained from the fact that it has consistently met milestones and achieved outstanding resource upgrades as exploration progressed.

The company has two projects, Amaam North and Amaam, with the former expected to initially come into production at a rate of 1 million tonnes a year, scaling up to 6.5 million
tonnes a year over the coming years.
Coal from that project will be trucked 35 kilometres to the port of Beringovsky, but as production increases there is the prospect of transporting to a port to the south-east,
which would also provide ready access to coal produced from Amaam.

Tigers’ prefeasibility study at Amaam North confirmed the potential for a low cost 11-year mine life project with production starting in the second half of 2015. The study
showed after-tax cash flow would be in the order of $US430 million and the internal rate of return is estimated to be 37 per cent. The project has a net present value of about
$US180 million ($194 million), more than double the company’s market capitalisation.

Tigers Realm is another coal company that has been buffeted by negative sentiment towards the industry, but if it keeps hitting its milestones, as its senior management team
has done, not just on this project but during their tenure with other companies, it will be hard to ignore.