Tiger Resources Limited - December 2011 Quarterly Activities Report

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

ASX Code: TGS
TSX Code: TGS

PERTH, Western Australia, Jan. 30, 2012 /CNW/ -

HIGHLIGHTS

Kipoi Copper Project

Kipoi Stage 1 - Heavy Media Separation (HMS) operations:

  • Ore processed - 157,339t
  • Concentrate produced - 26,017t
  • Copper in concentrate produced - 5,502t
  • Operating cost - $0.71/lb

Judeira - reverse circulation (RC) drilling assays:

  • 10m @ 1.58% Cu
  • 16m @ 1.14% Cu (Hole ended in mineralisation at 160m)
  • 17m @ 1.12% Cu
  • 20m @ 0.82% Cu (Hole ended in mineralisation at 156m)
  • 36m @ 0.8% Cu

Lupoto Copper Project

Exploration drilling completed during the quarter at:

  • Kapampala - 2,535m AC

Corporate

  • Cash of $5.0m at the end of the quarter
  • Trade receivables from the sale of concentrate of $4.3m at 31 December 2011
  • $2m payment due to Gecamines on commencement of commercial production paid in October 2011

Tiger Resources Limited (ASX/TSX code: TGS) ("Tiger" or "the Company") is pleased to report its activities from the Company's projects in the Democratic Republic of Congo (DRC) for the December 2011 quarter.

KIPOI COPPER PROJECT (60%)

The Kipoi Copper Project is located approximately 75 kms NNW of Lubumbashi in the Katanga Province of the DRC. The Company is undertaking a phased development at Kipoi, where the Stage 1 HMS plant has already commenced production and will process 2.7Mt of ore grading approximately 7% Cu to produce a total of 113,000 tonnes of copper in concentrate over its 39 month1 life.

A definitive feasibility study (DFS) for a Stage 2 solvent extraction electrowinning (SX-EW) plant development, targeted to come on stream in 2014, is currently under way. It is envisaged that ore from the Kipoi Central, Kipoi North, Kileba South and other deposits within the Kipoi Project area, and within the nearby Lupoto Project, will be processed during the Stage 2 phase. The Company expects to release the DFS in the second half of 2012.

The Company's immediate focus is to increase the mineral resources available as feedstock to the Kipoi plant, complete the SX-EW definitive feasibility study and move Stage 2 into development. Increased resources will potentially increase the mine life and/or annual plant throughput. Cash flows generated from Stage 1 will be used to fund the development of the Stage 2 plant and infrastructure.

Kipoi Stage 1 HMS Operations

Plant throughput for the December 2011 quarter was 157,339 tonnes of ore at a head grade of 5.34% copper, to produce 5,502 tonnes copper in concentrate available for sale.

 
QUARTERLY PRODUCTION SUMMARY
    OCTOBER NOVEMBER DECEMBER Q4 2011
MINING            
Ore Mined1 Tonnes 109,496 28,057 17,766 155,319 658,899
Ore Grade % 5.8% 5.5% 5.5% 5.6% 5.2%
Waste2 Tonnes 688,316 582,336 596,943 1,867,595 6,467,790
             
ROM STOCKPILE            
High Grade Copper Tonnes 331,713 298,858 243,841 243,841  
Grade % 4.6% 4.5% 4.5% 4.5%  
Oversize material3 Tonnes - 10,582 28,621 28,621  
Grade Grade - 8.2% 8.2% 8.2%  
             
PROCESSING            
Ore Processed Tonnes 52,268 50,383 54,688 157,339 386,437
Head grade % 5.65% 5.76% 4.65% 5.34%  5.55%
Recovery % 62.7% 71.1% 63.1% 65.7%  57.5%
Concentrate Tonnes 8,742 9,061 8,214 26,017 57,935
Copper Produced Tonnes 1,851 2,065 1,604 5,502 12,321
             
COSTS            
C1 Cash Cost4 $/lb $0.57 $0.69 $0.90 $0.71 $0.70
             
SALES            
Concentrate Tonnes 9,940 9,290 10,357 29,587 57,161
Payable Copper Tonnes 1,050 1,052 1,047 3,149 6,076
Revenue ($'000) $7,125 $7,804 $7,402 $22,331 $46,451
Realised Price5 $/t of Cu $6,786 $7,418 $7,069 $7,091 $7,645
             
CONCENTRATE
STOCKPILE
           
Concentrate Tonnes 3,141 2,911 774 774  
Grade % 22.3% 22% 20% 20%  

Notes:

(1) Ore mined is VHG and HG material > 3.25% Cu

(2) Waste includes MG and LG ore stockpiled for future production from the Stage 2 SXEW development.  Production ore mining commenced on 1 April 2011.

(3) Oversize material is ROM ore that has been processed through the primary crusher and stockpiled ready for processing through the secondary crusher

(4) C1 Cash cost includes all direct costs of production, excluding royalties, based on copper produced in concentrate.  Commercial production commenced during the quarter, prior to this date, all production costs and revenues were capitalised to mine development.

(5) Realised price is calculated based on the volume of payable copper metal sold in concentrate, including any prior period quotational period pricing adjustments.

__________________________________
1 Stage 1 Kipoi Central HMS ore processed average recovery is estimated at 60% as per the DFS

Mining continued to perform strongly, with a total of 2,022,914 tonnes of material moved during the quarter delivering 155,319 tonnes of ore to the ROM stockpile.  The reduction in total material moved compared to the prior quarter is due to the impact on operations of the wet season.  The high grade ROM stockpile of 243,841 tonnes represents more than three months of ore available as feed to the HMS plant.

Pit 1A now has ore expressed at the 1300m RL level. As the current high grade ROM ore stockpile ensures at least three months of plant feed, the Company has elected to process this and accelerate the mining of waste in Pit 1B.

Plant feed was sourced from the high grade stockpile during the quarter, with limited availability of very high grade ore.  This resulted in a lower average plant head grade of 5.34% for the quarter, and in particular a head grade of 4.65% in December.  The plant head grade is expected to increase in 2012 when mining recommences in the very high grade ore zones.

Grade control activities have identified that the average density of ore within 20m of the surface is between 5% and 10% lower than modelling, resulting in some ore losses.  This reflects the extent of previous artisanal mining at Kipoi Central where the workings have been backfilled systematically with low grade ore. The lower density is not expected to persist, as only limited artisanal workings are evident below current pit levels.

The production rate through the HMS plant during the quarter was affected by stoppages due to de-bottlenecking, repairs to the primary crusher and an unplanned maintenance shut-down of the secondary crusher.  The stoppages resulted in processing rates below nameplate level. However, since completion of these activities the plant has been achieving daily throughput rates in excess of 120% of nameplate capacity.

The operating cost of $0.71/lb of copper produced, which is higher than the target of $0.54/lb, reflects the impacts of the above-mentioned issues as well as additional grade-control drilling costs of $0.9 million incurred in December (for ore to be delivered in 1Q 2012).  Excluding the grade-control drilling costs, the operating cost performance for the quarter was $0.64/lb.

All sales of concentrate product were to local smelters in the DRC.

Stage 2 SX-EW Development

Work progressed with metallurgical test work and exploration and resource definition drilling.  The DFS for the SX-EW remains on schedule for completion in mid-2012.

Near Mine Exploration

Assay results from the Judeira RC drilling program completed in the September 2011 quarter were announced on 1 December 2011.  Copper mineralisation was intersected in 18 of the 22 RC holes completed, with three holes ending in mineralisation at depths in excess of 150m.

The 22-hole RC drilling programme was designed to test for strike, width and depth extension of copper mineralisation identified by the first phase drilling completed in June this year at the southern and northern sections of the Judeira prospect.

An economic cut-off grade of 0.3% copper has been used for this second phase of RC drilling, reflecting the findings of the Scoping Study for the development of a Stage 2 SX-EW facility at Kipoi.

The assay results confirm the continuity of copper oxide mineralisation down dip in the southern mineralised area at Judeira South and suggest continuous mineralisation on sections in the central and northern limit of the Judeira North area.

A follow-up diamond drilling programme is planned for early 2012 and will target areas where mineralisation is open.

The significant intersections include:

10m @ 1.58% Cu intersected in hole JUDRC030

36m @ 0.8% Cu intersected in hole JUDRC031

21m @ 0.58% Cu intersected in hole JUDRC033

22m @ 0.66% Cu intersected in hole JUDRC038

22m @ 0.46% Cu intersected in hole JUDRC042

43m @ 0.77% Cu intersected in hole JUDRC043

40m @ 0.56% Cu intersected in hole JUDRC044

16m @ 1.14% Cu intersected in hole JUDRC046*

17m @ 1.12% Cu intersected in hole JUDRC047

20m @ 0.82% Cu intersected in hole JUDRC048*

28m @ 0.69% Cu intersected in hole JUDRC049*

* Ended in mineralisation

Resource Upgrade Drilling

Kipoi Central

The Kipoi Central drilling programme is designed to upgrade the Inferred Resource to Indicated Resource status. The majority of the planned holes are located in the north-western area of Kipoi Central with the final three holes located in the south-eastern area, with the drilling programme essentially closing the spacing to 50m.  Three of the planned holes were not completed due to the proximity of their collars to the pit wall.  At the end of the quarter, the final hole of the 3,640m programme was in progress.

Assay results are pending for all diamond drilling (DD) and are expected in the first quarter of 2012. Visible mineralisation and Niton XRF results indicate that mineralisation is consistent with the proposed model.

Kileba

The Kileba programme is designed to upgrade the current Inferred Resource to Indicated Resource status. The programme consists of 63 priority 1 collars for a planned 7,590m and 24 priority 2 collars for 2,350m, which will reduce collar spacing from 50m to 25m. As at the end ofthe quarter, 23 DD holes (KLBDD038 to KLBDD060) had been completed for 3,645m.

As expected, oxide mineralisation has been encountered in most holes, with some extensive high grade intercepts in the highly weathered dolomite and strong talc and clay altered deformed unit. The sulphide zone has been wider than anticipated in some holes, with very good chalcopyrite mineralisation being intercepted. For example, in KLBDD053 chalcopyrite was observed from 127m to 157m, with the strongest concentration from 139.5m to 156m. This occurs mainly in fractures and as dissemination, but also as semi-massive as occurred from 145.4m to 148.80m. The host lithology in this interval includes strong laminated and bleached dolomitic shale in the upper part and vuggy dolomite with strong quartz carbonate veining and brecciating in the central and the lower part.

The lithological unit intersected in most of the holes includes siltstone, shale, dolomite and soft altered talc clay unit, also dolomitic siltstone, greywacke and or volcanic sediment, tillite, and narrow units of specular hematite. Oxide mineralization was observed in all the lithology above.

A strong talc-clay unit, possibly a hydrothermally altered dolomite related to shear and/or fault structures, is in most cases hosting significant malachite mineralisation.

In DD hole KLBDD054 very strong malachite mineralisation (5-10%) was intersected in the greywacke/volcanic rock between 124.5m to 127.7m.  This unit frequently marks the contact between siltstone/shale and dolomite above the drill holes against tillite towards the bottom of the holes in the north-east slope of the Kileba hill.

Observation of the surface geological mapping of the hill at Kileba suggests that the area is related to a repetitive tight anticline and syncline structure, defining a map scale "M" fold characterized by more than two sub-parallel anticline hinge lines. Further observation shows that the hill exhibits double plunging anticlines facing one another, with the SE plunging to the NW and likewise the NW plunging to the SE.

Structural interpretation of regional airborne magnetic data indicates that the Kileba prospect resides within the eastern limb of a large scale NW-SE oriented synclinal fold structure.

LUPOTO PROJECT (100%)

Kapampala

An RC drilling program was completed at Kapampala during the quarter, with 28 holes drilled for 2,535m. The program follows an air core (AC) drilling program completed in 2008. Early indications are that there is an oxide layer (generally  containing <1% Cu) present, in a silty pebbly sandstone.  All assay results are pending.

Mwana East

The 5,000m RC program at Mwana East of 68 holes for 5,106m of drilling completed in the September 2011 quarter returned assay results which show a shallow oxide mineralisation below 10m of cover, quickly moving to a primary ore host environment. Mineralisation was generally below 1.0% Cu. The target has been classified as a primary ore target.

CORPORATE

Cash on hand and deposit at 31 December was $5.0 million.

Trade receivables in relation to copper concentrate sales were $4.3 million at the end of the quarter and stockpiles of concentrate containing 154t of copper with an estimated sale value of $0.6 million were available for immediate sale.

In October 2011 the Company paid $2.0 million to Gecamines, being a scheduled payment due on commencement of commercial production. A final payment of $2.0 million remains due for payment to Gecamines in October 2012.

BACKGROUND

The Kipoi Project covers an area of 55 square kms and is located 75km north‐north‐west of the city of Lubumbashi in the Katanga Province of the DRC. The project contains a 12km sequence of mineralised Roan sediments that host at least five known deposits: Kipoi Central, Kipoi North, Kileba, Judeira and Kaminafitwe.

The Company has reported JORC-standard resources at three of the deposits, Kipoi Central, Kipoi North and Kileba. The principal deposit is Kipoi Central, which contains a zone of high grade copper mineralisation within a much larger, lower grade global resource.

The Company has adopted a staged development approach at the Kipoi Project. The high grade zone of mineralisation at Kipoi Central is being exploited during the Stage 1 development. During the three-year operation of Stage 1, 900,000tpa of 7% Cu is planned to be processed through the HMS plant with a recovery rate of 55%, to produce the equivalent of approximately 35,000tpa of copper.

The Company is currently undertaking a DFS to evaluate the economic viability of constructing a SXEW plant (Stage 2), targeted to come on stream within three years of the start of the HMS operation. It is envisaged that ore from Kipoi Central, Kipoi North and Kileba South and the other deposits within the Kipoi Project and within the nearby Lupoto Project will be processed during the Stage 2 phase.

The northern boundary of the Lupoto Project is located approximately 10kms to the south of the Kipoi Project and the project area can be accessed by a road that leads directly to Kipoi. The Company holds a 100% interest in the Lupoto Permit (PR2214) and Aurum sprl has the right to a 1% NSR from any production.

The Sase deposit is situated within the Lupoto Project in an area of intersecting structures associated with a major project-scale fault system, the Sase fault zone. Fault breccias related to the fault systems represent important exploration targets.  Several analogous geological settings have been identified in other parts of the Lupoto Project area. Mineralisation at Sase is hosted in intensely brecciated sedimentary rocks, mainly carbonaceous siltstones, shales and dolomites of the lower Kundelungu group. These stratigraphic units are known to host one of the world's largest Pb-Zn-Cu deposits at Kipushi, 50km west of Lubumbashi in the DRC.

Caution Regarding Forward Looking Statements: The forward-looking statements made in this report are based on assumptions and judgments of management regarding future events and results. Such forward-looking statements, including but not limited to those with respect to the Stage 1 mining operation and the planned Stage 2 mining operation at the Kipoi Project, involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual market prices of copper, cobalt and silver, the actual results of future mining, processing and development activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's filed documents. There can be no assurance that the Stage 1 HMS plant will operate in accordance with forecast performance, that anticipated metallurgical recoveries will be achieved, that future evaluation work will confirm the viability of deposits identified within the project, that future required regulatory approvals will be obtained, that the Stage 2 expansion of the Kipoi Project will proceed as planned and within expected time limits and budgets or that, when completed, the expanded Kipoi Stage 2 project will operate as anticipated.

Competent Person Statements:  The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Brad Marwood, who is a Member of The Australasian Institute of Mining and Metallurgy.  Mr Marwood is a Director and full-time employee of the Company.  Mr Marwood has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and to qualify as a "Qualified Person" under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr Marwood consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

SOURCE Tiger Resources Limited

For further information:

For further information in respect of the Company's activities, please contact:

Brad Marwood Stephen Hills Nathan Ryan
Managing Director Chief Financial Officer Investor Relations
Tel: (+61 8) 6188 2001 Tel: (+61 8) 6188 2002 Tel: (+61 3 ) 9622 2159
Email: bmarwood@tigerez.com Email: shills@tigerez.com Email: nryan@tigerez.com

Company website: www.tigerresources.com.au

 

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