This tax was increased mid last year and applies only to copper concentrates, as a way to incentivise companys to refine concentrates within the DRC. As TGS prepares to commission their SXEW next Qtr and move towards 50,000 t/pa cathode in Q2 2015, this tax increase will be negligible and only apply against the remaining production for 2014 from the HMS plant. Notwithstanding, any resultant costs of this tax increase was accounted for in the most recent npv re-calc.
I refer you to an announcement released by Tiger 10/6/13 of which I provide an exert for reference below:
The DRC government announced in April 2013 that it would prevent companies from exporting copper and cobalt concentrates. The clarification is required following a media report in the Sydney Morning Herald and The Age newspapers on the weekend which said that the ban was for “exports of copper and cobalt” and would “greatly affect Tiger’s operations”. However, Tiger currently sells more than 80 per cent of its concentrate to smelters within the DRC, as there is strong demand for it domestically. The remainder is sold to a smelter in Zambia but this has support of the DRC government. Once Tiger’s Stage 2 Solvent Extraction Electrowinning (SXEW) plant, currently under construction, comes online mid-next year, Tiger will produce a high value-added LME-grade copper cathode product. This operation also has DRC government support. Construction of Tiger’s SXEW plant is being funded by HMS operations.
TGS Price at posting:
37.7¢ Sentiment: Hold Disclosure: Held
