Interesting report. The tank leach circuit operated at full tilt...

Interesting report.

The tank leach circuit operated at full tilt producing 120,485T at 3.12% with 82.6% recovery = 3,105T Cu. That's 12.5kT per year of copper from the stacked slimes, and they have enough slimes to last until July or so from what I gathered. The plant used to produce about 20kT through the heap-leach circuit and the tank leach was intended ramp up to 32kT so things that can be inferred are:

1. Nothing wrong with the tank leach circuit now. Recovery perhaps a bit low, but it's making up for it by producing above name-plate.
2. The heap-leach production was way down from what should be ~5kT to 1.6kT.


The low production in the heap-leach is no surprise. They ran out of stacked low-grade ore leading into Q4 and then pivoted to Kipoi North, where they stacked 90kT and this will continue to do so at least until the end of Feb. It's difficult to say how much they will produce through the heap-leach circuit next month, but it might be high at ~4kT as a guess. The problem is they have overburden at Kipoi north so it's expensive to mine - that's the reason TGS have a high AISC cost this quarter - but at least it's transitional copper and keeping the heap-leach turning over.

Against my expectations, they had no problem finding 3rd party ore, and just waiting on approval of term sheets before going ahead. The terms would be very interesting as to who captures the margin, but when you have 'multiple' offers, you would hope the terms favor TGS. If they make $1/lb off this material and pump 5kT of heap-leach cathode through the SXEW circuit, they would be looking at ~$10M USD a quarter. Add on 3kT from the tank circuit at say, about $1.5lb margin and they're making $20M a quarter. There are lots of assumptions there, but it's down the middle bet IMO.

Profitable mine is the story.

If they didn't sell, I would have said stop they should mining at Kipoi all together and just toll all the 3rd party ore they could until they were in a better place. There's a financial strategy here that could get them out without selling out. Seems such a shame.