Kipoi Stage 2 DFS confirms project economics

9th January 2013 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH ( - Copper developer Tiger Resources on Wednesday reported that the definitive feasibility study (DFS) on the Stage 2 solvent extraction electrowinning facility at its Kipoi project, in the Democratic Republic of Congo (DRC), had confirmed the project economics.

Some 443 000 t of copper could be produced from the Kipoi Central, Kipoi North and Kileba deposits, over a nine-year period, the ASX- and TSX-listed Tiger reported.

“The results from the definitive feasibility study underline the robust economics of Kipoi and this should add significant value to our shareholders and the DRC,” said Tiger MD Brad Marwood.

The study found that, based on a copper price of $3.40/lb in 2014 to 2017, the project could generate an after-tax internal rate of return of 44% and a net present value of $378-million.

“The results are very encouraging and demonstrate that Kipoi should generate significant cash flow based on the forecasted low cash operating costs.”

The existing Stage 1 infrastructure at Kipoi would act as a springboard for the development of Stage 2; thereby, minimising the costs for the Stage 2 development, Marwood said.

After a short overlap period when the heavy media separation (HMS) and electrowinning facilities would operate simultaneously, the HMS plant would be superseded in the second quarter of 2014 by the electrowinning plant, which would produce LME grade A copper cathode directly at the mine site.

Marwood added that the HMS plant was currently producing above 36 000 t/y of copper, in a 25% concentrate.

The Stage 2 operation would initially process residue from the HMS plant, with around 4.9-million tons at 2.8% copper, which would provide feedstock for the electrowinning plant for the first two-and-a-half years.

On this basis, mining at Kipoi would only need to start in 2016.

“The company’s immediate aim was to further improve the Kipoi economics by expanding the resource, complete the feasibility study and move Stage 2 into development,” Marwood added.

He also noted that the combined Kipoi Stage 1 and 2 projects were fully funded on the basis of current average copper price projections, but added, however, that management considered it prudent to secure copper price hedging during the development of Stage 2, to ensure stability of revenue.

In conjunction with the hedging, Tiger also on Wednesday mandated Nedbank Capital to provide an $80-million project debt facility to partially fund the development of Stage 2.

Marwood said the facility would be used to supplement cash flow from the existing HMS operation at Kipoi in financing the construction, development and infrastructure for the $150-million Stage 2 development.

Stage 2 production would allow Tiger to increase its yearly output to some 50 000 t/y, with production slated to start in 2014.