Tiger Resources Limited Announces Definitive Feasibility Study, Confirming Viability of Mining Development at Kipoi Project, in Democratic Republic of Congo

    PERTH, Western Australia, Sept. 5 /CNW/ - Perth-based emerging copper
miner Tiger Resources Ltd (ASX/TSX - TGS) ("Tiger" or the "Company"), is
pleased to announce positive results from a Definitive Feasibility Study (DFS)
into the Stage 1 development at the Kipoi Copper Project in the Democratic
Republic of Congo ("DRC").
    The study has been based solely on mining of the defined high grade oxide
(+3.25% Cu ore) at the Kipoi Central deposit, and takes no account of possible
extension of mine-life from the planned Stage 2 mine development or from
mining of other resources identified from the ongoing exploration programmes
within the Kipoi Project area.
    Key financial results of the DFS, based on a throughput capacity of
900,000tpa at a head grade of 7% Cu over a three year period to produce
95,000t of copper metal are as follows:

    Table 1:  Project Economics Based on Copper Price of US$2.50/lb
              (base case copper price based on average of conservative
              market forecasts to year 2012 as advised to the Company)

    Description                                         Base Case Result
    Capital expenditure                                 US$59 million
    Cash cost per pound                                 US$1.20
    Project cash flow                                   US$138 million
    Net present value (at 10% discount rate)            US$58 million
    Internal rate of return (after tax and royalties)   51%
    Payback                                             1.5 years

    Managing Director David Young said "We are extremely pleased with the
outcome of the DFS particularly given the challenging development environment
within the resources industry, not just in the DRC but globally. The
exceptional high grade resource at Kipoi Central should ensure the Company can
develop a robust project, with an internal rate of return of more than 50%,
capable of generating positive cash flow under varying economic scenarios and
will provide a strong platform for the growth of Tiger into a 100,000tpa Cu

    Feasibility Study

    The Definitive Feasibility Study (DFS) follows an Options Study in June
2007 which identified that the Kipoi project could be developed in two Stages;
Stage 1, a short duration pyrometallurgical (shaft or electric arc furnace)
plant to recover 25,000 to 30,000 tonnes per year of black copper from high
grade oxide ores followed by Stage 2, a leach, Solvent Extraction and
Electrowinning ("SXEW") plant with similar capacity to treat the bulk of the
oxide ores. This was followed by a Feasibility Study in September 2007
examining the two options in more detail. The results of this DFS are from a
more detailed examination of the Stage 1 project only.
    All the components of the DFS have been prepared and managed by
internationally respected consulting groups with input from Tiger personnel.
The economics of the DFS are based only on the measured and indicated
resources defined for the high grade +3.25% Cu ore at Kipoi Central and do not
include the larger approximately 3% Cu resource already delineated.
    The Stage 1 mining project considered in the DFS is a greenfield project
with an initial 38-month operating life. The process plant comprises crushing,
scrubbing and heavy media separation ("HMS") to produce a copper concentrate
suitable for smelting in a shaft furnace. The crushing and HMS operations will
have a feed rate of 900,000 tonnes per year to produce approximately
120,000 tonnes per year of 25% copper concentrate. Two shaft furnaces will be
constructed alongside the HMS plant. Design output is approximately
32,000 tonnes per year of copper as "black copper" ingots (approximately 95 to
98% copper metal).
    The Stage 1 plant will be available to treat other ores after the initial
38 month period and can potentially continue to operate once Stage 2 is
commissioned. During the Stage 1 mining phase it is expected that a total of
4.8Mt @ 2.97% Cu lower grade ore and unrecovered material from Stage 1
processing will be stockpiled which can be used as feed in the planned future
Stage 2 SXEW plant.
    Stage 2 would be constructed adjacent to the Stage 1 project, and
comprise an acid leach and SXEW facility with capacity for a throughput of
1Mtpa producing LME grade A copper metal cathodes. The Stage 2 development
will also benefit from the general infrastructure to be constructed to support
Stage 1 operations.
    The schedule for the execution phase of the Stage 1 project has been
developed to achieve the earliest practicable completion of the construction
and commissioning works once final board approval is given to commit to the
project. Development and construction would take one year and it is the
Company's objective to be in production by no later than the end of 2009. To
achieve completion within that time-frame the Company is in the process of
expanding both its DRC and Perth based teams to include the services of a
range of key commercial and technical professionals required to develop the
mining operation complemented by specialist service providers in the areas of
mining development, engineering design and project delivery.
    The Company has received strong expressions of interest from a number of
financial institutions and potential offtakers in respect of the provision of
debt and convertible debt funding to support project development. The Company
is targeting project finance for project development by the end of 2008.

    DFS Process

    The DFS has been prepared and managed by Lycopodium in conjunction with a
number of other consultants. The contribution of organisations to the DFS is
summarised in Table 2.

    Table 2                 Study Contributions

    Exploration, geological data collection,
     structural and mineralisation models.    Cube
    Geological database, interpretation and
     validation                               Cube
    Resource Estimation                       Cube
    Mine design and scheduling                Cube
    Mine capital and operating cost
     estimates                                Cube
    Metallurgical testwork                    Intermet Study
    Metallurgical interpretation/crushing/
     scrubbing/HMS                            Intermet Study
    Metallurgical interpretation smelting     Lycopodium
    Site geotechnical assessment              Knight Piésold
    Ore fines storage facility design         Knight Piésold
    Hydrological assessment                   Knight Piésold
    Process plant design                      Lycopodium
    Infrastructure design                     Lycopodium/Knight Piésold
    Access road upgrade assessment            Knight Piésold
    Project implementation                    Lycopodium
    Capital cost estimation                   Lycopodium/Cube/Tiger
    Operating cost estimation                 Lycopodium/Cube
    Risk assessment                           Lycopodium/Cube/Knight-Piésold

    Mineral Resource Estimation

    Cube Consulting Pty Ltd were commissioned by the Company to undertake an
independent Resource update estimation of the Kipoi Central Copper Project at
the completion of a programme of infill drilling. The focus of this update was
an area designated the Area of Interest (AOI) and was defined as the portion
of the total resource at Kipoi Central that was to form the first three years
of planned production for the Stage 1 project. Total Mineral Resources within
this AOI above 5% are 2.9Mt @ 8.1% copper for 232,000t of contained copper
metal (Table 3).
    Mineral Resource and Ore Reserve estimates have been classified and
reported using the guidelines of the Australasian Code for Reporting of
Exploration results, Mineral Resources and Ore Reserves (the "JORC Code,
2004"). These guidelines are generally consistent with Canadian National
Instrument 43-101 - Standards for Disclosure of Mineral Projects
("NI 43-101").

    Table 3:  Kipoi Central Project Classified Resource
              greater than 5% Copper

                            Tonnes Copper Copper Cobalt Cobalt Silver Silver
    Classification  Category   Mt     %   (000't)   %   (000't)  g/t (000'oz)
    Measured         Oxide    1.5    8.4    125    0.2       3   4.6    222
                  Transition  0.3    8.8     24    0.1     0.3   5.9     52
                     Fresh    0.2    8.2     14    0.1     0.2   3.9     21
    Indicated        Oxide    0.2    6.9     17    0.1     0.3   3.4     27
                  Transition  0.2    7.5     12    0.1    0.22   5.4     27
                     Fresh    0.5    7.6     39    0.1    0.57   5.5     91
    Total                     2.9    8.1    232   0.15       4   4.8    441

    Mineral Reserves

    The Mineral Reserve is the portion of the Measured and Indicated Mineral
Resource (adjusted for modifying factors) contained within the mine design.
Total Mineral Reserves within the JORC Code, 2004 and NI 43-101 classification
of Proven and Probable is as follows:

    Table 4: Kipoi Central Project - Stage 1 Mineral Reserve by Material Type

                                 Cut-  Ton-               Contained Metal
    Destina-  Reserve  Material  off   nes  Cu  Co  Ag  ---------------------
     tion    Category            Cu%    Mt  %   %  g/t  Cu(kt) Co(kt) Ag(koz)
    HMS Feed  Proven     Oxide,
                      Transition +3.25 2.54 7.1 0.2 4.5  181     4.1    371
             Probable    Oxide,
                      Transition +3.25 0.14 5.5 0.1 3.4    7     0.2     15
    Total Reserves               +3.25 2.68 7.0 0.2 4.5  188     4.3    386

    Operating Costs

    The project operating costs have been estimated to an accuracy of +/-15%
and are based on pricing obtained in the second quarter of 2008 (2Q08). All
costs are quoted in United States dollars (US$). Costs per tonne of ore and
pound of copper are based on the design annual throughput of 900,000 tonnes
and nominal production of 32,300 tonnes of copper.
    The most significant contributors to the operating costs are coke for use
as a furnace fuel and reductant, at US$33 million per year, and power at
US$12 million per year. The principal cost of power is diesel fuel at US$1.50
per litre. Tiger is currently in advanced negotiations with the DRC state
electricity company (SNEL) regarding the provision of grid power to the
project. The use of mains power would result in a significant reduction to
operating costs to those used in the base case financial evaluation.
    Overall development costs have been reduced as a consequence of the
existing excellent infrastructure already in place at Kipoi. This covers
access to sealed road to Lubumbashi, capital of the Katanga Province, railway
and high voltage power lines running through the project and ready
availability of water. Project operating costs, including mining, process
plant and general and administration are summarised below.

    Table 5:  Summary of Operating Costs (US$, +/-15%, 2Q08)

    Cost Area         Annual Cost    Cost per Tonne Ore    Cost per Pound
                         (US$M)             (US$)           Copper (US$)
    Mining                  15.2                  17.0              0.22
    Processing              55.3                  61.9              0.79
    General & Admin         13.7                  15.4              0.19
    Total Cost           $ 84.20               $ 94.30           $  1.20

    Capital Costs

    The capital costs are presented in US dollars as at the second quarter
2008 (2Q08) to an accuracy of plus or minus 15%.
    The table below summarises the capital cost estimate for the project
including contingency.

    Table 6: Capital Estimate Stage 1 (including 10% contingency)

    Description                                            US$M

    DMS plant & other infrastructure                       25.3
    Furnaces                                                8.4
    Pre-production owners costs                            13.9
    Pre-production mining costs                             9.8
    Environmental bonds & Import duties                     1.9
    Total                                               $ 59.30

    All items have been costed on an "as new" basis and the Company believes
that purchases of second hand plant and equipment should result in significant
cost savings. Tiger is also investigating other opportunities it has
identified to reduce capital costs with the potential to significantly enhance
the overall economics of the project.

    Mining Process

    A mining schedule has been generated to produce 0.9 million tonnes of ore
feed per annum over a 3 year project life following 6 months of waste
pre-stripping operations. For the mining operations a base case study examined
an owner operator mining scenario. Mining will be by conventional truck and
excavator methods, and all the major equipment items will be leased on
maintenance and repair contracts.

    Project Ownership and Mineral Title

    The project area is covered by PE533 and a part of surrounding PR1063.
SEK sprl has the rights to the Kipoi Project and is a DRC registered company
jointly owned by Congo Minerals sprl (60%) and La Générale des Carrières et
des Mines (Gécamines) (40%), a DRC State-controlled mining company. The
Company is acquiring a 60% interest in SEK sprl pursuant to an agreement with
the shareholders of Congo Minerals sprl.
    In 2007 the DRC Government established a Commission to review the DRC
State's interest in various mining projects, and more than 60 joint venture
contracts governing mining projects were reviewed, including the contract
governing the Kipoi Project. The results of the review were announced in
February 2008. The DRC Government has recently announced discussions to
finalise the contract review process will be held in September 2008.
Negotiations are at an advanced stage, and it is expected that contract
conditions will be formalised in the near future without any significant
changes to existing contractual terms. Discussions with the Commission Review
body to date indicate that all requirements have been satisfied, with
Gécamines and the Commission showing support for the development of the


    Two phases of metallurgical testing have been completed to investigate
appropriate process routes for the oxidised and transitional Kipoi Central
    Initial work was conducted by Ammtec under the supervision of Intermet
Engineering Pty Ltd. A second phase of testing was undertaken at Amdel. The
samples were obtained from diamond drill core recovered during the Kipoi
Central 2006/2007 resource diamond drilling program. This test work has
demonstrated the ores at Kipoi Central can be considered easily treatable with
no specific metallurgical processing issues. All oxide and transition
lithologies are amenable to Heavy Media Separation (HMS) technology to produce
a + 25% copper concentrate to be smelted in a shaft furnace to produce copper
metal in the form of 95% to 98% black copper.

    Sustainable/Community Development

    It is a commitment of the Company that as well as being a good corporate
citizen, the realisation of the project should have a positive impact on the
lives of neighbouring communities, so that these communities feel a sense of
partnership and become, in the broader sense, 'stakeholders' in the project.
    It is a component of the DFS that the majority of the labor force will be
housed in local communities and that employees shall be given an allowance to
assist with housing. Provision has also been made to assist with the upgrading
of health facilities, potable water and education, as well as providing
electrical power to these communities upon completion of an agreement with the
state electrical supply company (SNEL). It is envisaged that the Company will
assist in the establishment of sustainable economic enterprises within these
communities so that as the project develops and grows, so too shall the local
communities develop to ensure long term benefits for all stakeholders.
    Community support will be managed through an Economic and Social
Management Plan Fund (ESMP Fund) to be voluntarily established and financed by
the Company and managed by a Steering Committee comprising Company and
community representatives. In this way local communities can share in the
success of the project as the funding for the ESMP Fund is linked to the
Company's financial performance.


    Kipoi Central is one of five known copper deposits hosted in a 12km long
fragmented sequence of mineralised Roan sediments that have been mapped within
boundaries of the Kipoi Project in which the Company is earning a 60%
    In addition to resource drilling at the Kipoi Central deposit, resource
drilling has also been undertaken at the Kipoi North, Kileba and Judeira
deposits. The conceptual target for exploration is to define oxide and
sulphide resources in excess of 1 million tonnes of contained copper by end of
2008 to support future production of 100,000 tpa of copper metal.
    Following the completion of the Stage 1 definitive feasibility study, the
Company intends to immediately commit to a feasibility study to evaluate the
economic viability of constructing an SXEW plant producing 35,000tpa of copper
metal in conjunction with the continuation of the Stage 1 HMS plant capacity
of 35,000tpa. The SXEW plant will form Stage 2 of the proposed mining plan for
the Kipoi Project, and is scheduled to come on stream within 3 years of the
start of the HMS operation. It is envisaged that ore from Kipoi Central and
the other deposits within the Kipoi project would be processed at the Stage 2
development phase.

    Additional Notes:

    The Information in this report that relates to Mineral Resources is based
on a resource estimate compiled by Mr Ted Hansen and Mr Rick Adams, both of
whom are members of the Australasian Institute of Mining and Metallurgy
("AusIMM"). Mr Hansen and Mr Adams are directors and full time employees of
Cube Consulting Pty Ltd. Mr Hansen and Mr Adams each has sufficient experience
which is relevant to the style of mineralisation and type of deposit 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" (the
"JORC Code") and to qualify as a "Qualified Person" under National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr Hansen
and Mr Adams consent to the inclusion in this report of the matters based on
their information in the form and context in which it appears.
    The Information in this report that relates to Ore Reserves is based on a
Reserve estimate compiled by Mr Quinton de Klerk, a member of AusIMM.
Mr de Clerk is a director and full time employee of Cube Consulting Pty Ltd.
Mr de Clerk has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the
JORC Code and to qualify as a "Qualified Person" under NI 43-101. Mr de Clerk
consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.

    Caution Regarding Forward Looking Statements: The forward-looking
statements made in this news release 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 development
of a 900,000tpa Stage 1 mining operation and 35,000tpa Stage 2 SXEW plant at
Kipoi Central, 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 current exploration, 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.

For further information:

For further information: in respect of the Company's activities, please
contact: David Young, Managing Director, Tel: (+61 8) 9240 1933, Email:
dyoung@tigerez.com; Nathan Ryan, Investor Relations, Tel: (+61 8) 9240 1933,
Email: nryan@tigerez.com; Reg Gillard, Chairman, Tel: (+61 8) 9240 1933,
Email: gillardr@tigerez.com.au; Company website: www.tigerresources.com.au

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