crazy bots, page-15

I doubt anything under 45c would even be looked at.

Before that happens, 2-3 qtrs of stable positive cash flow and production. It would be helpful if the App5B makes some sense.

I still have unresolved questions re tiger:

1. How can Production be at 25mio in Sept qtr -14, then with HMS shutdown increase to $26mio. Some will say Sept-14 qtr represented TGS SEK 60% but who knows, this is part of the problem. Cannacord recently commented that even a@ 60% TGS shouldered all the cost anyway, i.e. Gecas (given they couldn't afford to pay their workers / power bills) contributed nothing.
2. Development Costs:
The June-14 Qtr activities report quoted the following progress:
‘Development
Key elements of construction progress of the Stage 2 SXEW plant to 30 June 2014 are as follows:

• Overall project 97% complete
• SXEW plant 100% complete and formally handed over to SEK
• Heap leach agglomerator and conveyors 100% complete and formally handed over to SEK
• Diesel power station 100% complete and fully commissioned
• Heap leach cells 1 and 2 100% complete
• Heap leach cells 3 (93% complete) and 4 (10% complete)
• Overland conveyors 48% complete’

I also a table consolidating forecast development expenditure and subsequent actual expenditure (other fixed assets) for SXEW plant & equipment costs.

	Column 1	Column 2	Column 3
0	Development Cost Reconciliation​
1	Appendix 5B	Estimated Cash Outflows (Item 4b 'Development' - Appendix 5B)	Cashflows relating to Investing Activities (Item 1.8c 'Other fixed Assets - Appendix 5B)
2		​
3	March Qtr 2014	$20mio​	$33.6mio​
4	June Qtr 2014	$43mio​	$21.7mio​
5	Sept Qtr 2014	$16mio​	$23.9mio​
6	Dec Qtr 2014	????​	????​

Note:

* The Dec Qtr 2013 Appendix 5B Note 4 stated SXEW development of $53.9million during the quarter (YTD: $124.3 million)

* The company reported (9 April 2013) and I quote that: “LSTK and fixed priced contracts have now been executed for works totaling $110 million of the $161million project budget. The balance of the project budget cost is allocated to owner’s and project management costs ($21 million including taxes, duties and fees), with the remainder of $30 million provided as an unallocated contingency”

Announcements made with respect to Phase I SXEW were that it was completed on time and within budget, therefore:
Budget per 9 April 2013 $161mio (inclusive of $30mio contingency)
(i) 2013 SXEW development cost per Dec qtr-13 App 5B (Note 4) = $ 124.3mio
(ii) 2014 SXEW development cost per Jan qtr-14 App 5B = $ 33.6mio
(iii) 2014 SXEW development cost per June qtr-14 App 5B = $ 21.7 mio
As of the June Qtr SXEW Development costs totaled $ 179.6mio, which is over the $ 161mio budget (which incl. $30mio contingency).

Or otherwise includes monies for Phases II and III??????

My questions:
(i) Has the SXEW Phase I been fully paid for and been booked in June Qtr Item 1.8c
(ii) Has the Overland conveyor and stacker (discretionary Phase II & III activity) been completed. If yes has expenditure been booked in Sept Qtr Item 1.8c
(iii) Has Heap leach pads 3 & 4 been completed (discretionary Phase II & III activity). If yes has expenditure been booked in Sept Qtr Item 1.8c
(iv) Has the upgrade of the power distribution commenced, what was the status of completion as of the Sept Qtr 2014.
(v) Does the $16mio forecast cash outflow for development (in Sept-14 Qtr forecast) relate to the outstanding completion of the upgrade to power distribution only.
(vi) If based on the Sept Qtr activities report that Tiger has commenced upgrading the power infrastructure to install two 30MVa transformers, with the first unit ordered and expected to be installed during the June quarter 2015, what is the expected cash outflow from the Dec Qtr-14 for development to complete this activity.
(vii) As previously stated in an interview, noting this preceeded the acquisition of Gecamines remaining stake in SEK, Mr Brad Marwood said that tenders had been called for Phase II SXEW and that this would be presented to the board for consideration after 3 Qtr 2014.

• Have the discretionary early works been completed by the builder of Phase I SXEW (Senet)
• Have tenders been received for Phase II
• Has a presentation of these tenders been made to the board
• Given the discretionary early Phase II & III works being completed / undertaken:

o How much does this reduce Phase II forecast development cost by to upgrade SXEW to 50kt/pa.
o How much does this reduce Phase II forecast development program duration by.
o Subject to a favorable financing facility being obtained to consolidate Gerard Metals / Taurus debt outstanding in Q2 2015, is it possible that the board may proceed with Phase II in 2015.

I want these questions answered, happy if someone can take this up with management. I think that thats the crux of the problem with TGS, too many surprises and when reporting over the last 6mths has been issued it offers more questions than answers.

In this market we need, concise comprehensive and clear reporting, broken down to costs per lb that can be compared with the presentation forecasts and understood. If we are one of the lowest cost producers, then show us the money......