Takeover??? perhaps but would have to be around 400 million +A...

Takeover??? perhaps but would have to be around 400 million +


A number of significant copper mines have recently been acquired that include:

- Capstone purchase of a 100% interest in the Pinto Valley Copper Mine in Arizona from BHP for $650 million. Pinto is expected to produce 60,000 tonnes of copper concentrates and 5,000 tonnes of copper cathode per year, at $1.80 per pound for 5 years. The property has significant exploration upside.
- Lundin purchase of a 100% interest in the Eagle Mine in Michigan from Rio Tinto for $325 million. Lundin will also invest an additional $400 million to complete a CAPEX of $770 million. The mine will produce 20,000 tonnes of nickel, 20,000 tonnes of copper and small quantities of gold, platinum and palladium each for a mine life of 8 years. Cash cost to produce copper is estimated at $2.00 per pound, and the property has significant exploration upside.
- China Moly purchased an 80% interest in the Northparkes Copper and Gold Mine in New South Wales from Rio Tinto for $820 million. The mine is expected to produce 54,000 tonnes of copper and 72,000 ounces of gold each year in a concentrate form. Mine life is projected for up to 2 decades.

The Kipoi Mine and associated satellite copper deposits have potential for a mine life that exceeds 15 years at an annualised production rate of 50,000 tonnes of copper cathode. This places Kipoi within the same peer group as Pinto, Eagle and Northparkes, and should be confirmed from resource upgrades, commissioning of the SXEW plant, and scale up of production to full plant capacity that is completed into late 2014.

Kipoi should draw an additional premium as it has the lowest cash costs within this peer group. The first two years of production will process previously mined feedstock ay an OPEX of US$0.72 per pound, and then at US$1.13 per pound for the remaining Life of Mine.

Our valuation is based on annualised production of 50,000 tonnes per annum and sum of the parts, which equates to $650 to $850 million. This equates to a valuation of $390 to $510 million for the 60% interest held by Tiger Resources, or A$0.58 to A$0.76 per share.