TIE (ASX) Revised projections

Originally posted by Battersea: ↑

Petra revised projections:

Tietto Minerals Limited (TIE) - Updated Abujar LOMP delivers 170kozpa

BUY - NPV10-derived TP increased to A$0.66/sh (at spot: A$0.85/sh).

TIE’s updated life of mine plan (LOMP) for the Abujar Gold Mine delivers a nine-year mine life from 2024 to 2032 with average yearly production of 170koz Au at AISC of US$982/oz.

TIE is employing a conservative run-of-mine mining model with a forecast LOM head grade of 1.04g/t Au, some 10% below the updated Jun.’23 Reserve grade of 1.15g/t Au (revised down from the Sep.’21 Reserve grade of 1.31g/t Au).

Production will be driven by ramping up plant throughput to 5.5Mtpa by 2025 (current run rate 4.8Mtpa).

We have bumped up our forecast production profile at Abujar CIL but pushed out the start of heap leach production to CY26F and reduced current year CY23F production to 95koz (prev. 105koz) on the back of a poor September month performance.
Updated LOMP·
Nine-year mine life from 2024-2032 delivers 170kozpa.·

Production head grade of 1.04 g/t Au after increasing blended plant throughput to 5.5Mtpa by 2025 for total production of 1.53Moz Au.·

Revised Reserves of 36.7Mt @ 1.15g/t Au for 1.36Moz vs Sep.’21 est. of 34.4Mt @ 1.31g/t Au for 1.45Moz.·

LOM AISC of US$982/oz (Petra f’cast US$1,100/oz).

Impact on our forecast Abujar CIL production·
We have adopted the LOMP head grade profile of 1.04g/t Au (Petra prev. est. 1.07g/t Au) but assumed mill throughput at 95% of the LOMP. The net impact is a 6% uplift in our forecast average annual FY24F-32F gold production to 161koz (prev. 153koz) –

Figure 1.

September production – below expectations·

TIE produced 10,962oz Au in September, milling 374kt @ 0.93g/t Au. Production was lower than expected due to rainfall impacting mining operations. Based on 2H production guidance, monthly production needed to be closer to 14.5koz. On the upside, October typically sees lower rainfall and is the start of the dry season.·

Revising Dec. Q’23 prod. to 36.5koz (12.2koz per month) for full year 95koz (prev. 105koz) – Figure 2.· On the back of disappointing production YTD,

TIE’s share price has underperformed its gold producing peers.

We note however, that TIE is now trading close to a 12-month low (Figure 3); delivering on guidance in the next few months could support a significant rerating. ·

With CIL operations at Abujar still to deliver, we have pushed out the start of the Heap Leach to FY26F.

Key Dates Ahead·

End 2023 – Testwork data from Heap Leach studies.·

Early 2024 – FID on Heap Leach Project.

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That seems a lot more sensible than the numbers being thrown around by Mark Strizek in the past. Looks as if the gold price is firming up steadily which will help greatly and the low cost hydro power readily available in Cote D'Ivoire is one of the reasons that the AISC is so compelling. Bring on 40c for starters.