28 May, 2008 (PART 1 OF 2) Long on projects, short on cash - We met with MD Mike Fischer on Monday ahead of today’s AGM. Since our last comment in early May, Tamaya Resources has announced several material developments with regards to the company's near-term outlook and progress, namely: * Plans to raise money via placement on top of shareholder rights issue (est: A$30m total?); * Announced magnetite intersection at Santa Dominga (492m@21%Fe). We expect the raising is to be used to pay down debt (>A$50m currently) and for working capital purposes. The Cinabrio Mine has been overhauled, with 12 new staff including several senior managers appointed. Re-structuring costs will impact bottom line, and we have further lowered our profit forecasts. Mine is regularly hauling >3000tpd, however mill still needs fine tuning (very hard ore, low recoveries). On track to do 80kt in May, 85kt next month (>900kt for calendar 08). Anticipates open cut approvals may arrive 3Q08, ahead of previous estimates. Grade should improve, however costs will take time to track below US$2.00/lb (last Q was >US$2.35) and we do not believe the operation is yet cashflow positive due to recent underperformance, capitalised costs. Lichvaz: Poor Metallurgical testwork results meant project was put on hold. Need to separate Cu from Zn (gold with copper), however sample probably un-representative. Further work ongoing, including OC and UG drilling. Could not approach banks without Met confidence. 28 May, 2008 (PART 2 OF 2) Magnetite: Project next door to CMP (private: Company Minera Pacifica) who have a pellet plant, and are the largest iron ore exporter in the country (5mt pellets, 3mt ore?). They also control the four ports. Potential for JV? Other projects: Portugal: Tungsten, Gold. Drilling ongoing, with aim of upgrading resources. The placement (up to 30% of issued capital + options) is dilutionary, and impacts both our EPS and current NPV going forward, hence our revision of price target. TMR have been saved by the copper price, and the Chile assets appear capable of turning around and generating reasonable cashflow in coming years, provided the copper price
TMR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
