increasing chile copper output

after re-reading the announcement delivered by the company after the close of the markets yesterday, there is no doubt the company is adjusting their focus to concentrate on increasing production from their Chilean copper operations.

With production ramping up to around 12000 tonnes of copper per annum and a average grade twice the grade of the average Chilean deposit, TMR are set to benefit greatly in the coming quarters from increasing profits/cashflow and reducing costs. Which in turn will fund further exploration/production.

With the massive Filipina Grande and Santa Dominga Projects just crying out to be developed, it is good to see TMR management finally realising that it is important to concentrate on its bread and butter, which is the already profitable Chile copper operations.

It wouldn't surprise to see the Lichkvaz Gold Mine in Armenia either being sold off or spun off, after the completion of the sizeable 45,000m drill program and resource upgrade. Although no where did they state they were mothballing the project all they said was they wanting to ensure maximum shareholder returns.

The fact the Lichkvaz project was acquired when the gold price was around $600 oz, the value of the project has appreciated significantly with an NPV of roughly twice what it cost, meaning a significant profit for TMR is they choose to offload it.

Given the number of mines in the immediate area of Lichkvaz and the current price of gold/copper/silver, TMR wouldn't have too much trouble finding a buyer.


If the company had any doubts about the viability of the Lichkvaz project there is no way they would be commiting to such a large exploration campaign, if anything the message coming from Hugh Callaghan is that the project could be even bigger than first thought, hence the need for more exploration and the possibility of a larger production profile and resource.

Longer term this adjustment in focus will seriously reward shareholders in regards larger profits/production from Chile.