Tiger Finding High-Grade Copper In The DRC

VANCOUVER– The mineral wealth of the Democratic Republic of the Congo (DRC) is far from tapped, if Tiger Resources’ (TGS-T, TRSDF-O) copper discoveries in the African country are any indication.

Tiger is exploring three projects in the DRC; Kipoi and Lupoto are within 100 km of Lubumbashi to the northwest and the third, Sakania, is some 200 km southeast of the provincial capital.

The Australian company is focusing its efforts on Kipoi and Lupoto, targeting Kipoi for copper production by the end of the year and envisioning Lupoto as an additional source of ore for the same processing facility. And exploration efforts at both projects are returning significant results.

At Lupoto, Tiger is probing the Sase zone, a grassroots discovery that stemmed from a regional exploration program in 2007. In 2008, aircore drilling confirmed the presence of mineralization at Sase, returned intercepts such as 67 metres of 2.83% copper and 0.19% cobalt, and 51 metres of 1.5% copper and 1.15% cobalt.

Now Tiger has punched 25 diamond- drill holes into Sase totalling 4,300 metres and the results are consistently strong. Hole 1 cut 107.1 metres grading 2.37% copper, hole 2 returned 142.8 metres of 2.14% copper, hole 3 intercepted 70.3 metres grading 2.17% copper, and hole 4 hit 30.5 metres of 2.12% copper.

Continuing along the 600 metres of strike defined thus far, hole 5 returned 38.9 metres of 5.23% copper, hole 6 cut 65.5 metres of 1.87% copper, hole 9 hit 94.5 metres averaging 1.38% copper, and hole 12 returned 60.5 metres at 3.49% copper. The 600-metre-long zone is as much as 200 metres wide and extends to a vertical depth of 120 metres, starting 10 metres below surface. Mineralization remains open along strike and at depth.

Sase is the most advanced target within the 293-sq.-km Lupoto project, which Tiger owns fully. The copper-cobalt zone at Sase is located along a mineralized fault system that can be traced for more than 15 km; Tiger says the system hosts many high-grade copper anomalies that require further exploration.

Mineralization at Sase, which appears to be controlled by a set of splay faults, occurs both above and below the oxide line, but the bulk of the mineralization identified to date sits above the line, between 15 and 120 metres below surface.

Lupoto is only 20 km southeast of Kipoi, which is Tiger’s more advanced project. Tiger is planning to develop Kipoi in two stages. In the first stage, for which the company completed a feasibility study in September, Tiger would mine only high-grade oxide ore grading better than 3.25% copper. The ore would be crushed, scrubbed, and concentrated via heavy media separation. The resulting concentrate would be smelted in a shaft furnace to produce black copper ingots, grading 95-98% copper.

The study investigated an operation processing 900,000 tonnes of ore annually, with an average head grade of 7% copper. The operation would produce 120,000 tonnes of copper concentrate each year, grading 25% copper, and the two shaft furnaces onsite would convert that concentrate into 32,000 tonnes of black ingot copper annually. Based on current high-grade resources, the mine is expected to operate for 38 months.

Costs to develop the first-stage operation are expected to come in at US$59 million. The operation would then produce copper at an average cash cost of US$1.20 per lb. copper and generate US$138 million in annual cash flow. The first-stage project carries a net present value of US$58 million, using a 10% discount rate, and provides a 51% internal rate of return after tax and royalties.

During the first stage of operations, Tiger expects to stockpile some 4.8 million tonnes of ore grading 2.97% copper, which will provide the initial feed for the second stage of operations. That phase calls for an acid-leach and solvent extraction-electrowinning (SX-EW) facility with capacity to process 1 million tonnes of ore annually, producing copper cathode.

Mineralization at Kipoi is hosted in three zones: Kipoi Central, Kileba, and Kipoi North. Only Kipoi Central currently hosts a defined resource, though resource estimates for the other two zones are expected shortly.

At Kipoi Cental, the high-grade zone intended to feed stage-one operations is currently 2.9 million measured and indicated tonnes grading 8.1% copper and 0.15% cobalt. The high-grade estimate is based on a 5% copper cutoff. That resource translates into reserves of 2.69 million proven and probable tonnes grading 7% copper, 0.2% cobalt and 4.5 grams silver per tonne.

Inferred resources at Kipoi Central, including lower-grade ores intended for stage two, come in at 13.4 million tonnes grading 3.3% copper and 0.1% cobalt. The Central deposit is expected to grow; drilling in 2008 lengthened the known strike length to 800 metres from 600 metres, with the zone still open to the south-southwest along strike and at depth. Significant results from 2008 drilling include 148 metres of 1.19% copper, 181 metres grading 1% copper, 26 metres of 2.95% copper, and 56 metres averaging 1.9% copper.

The zone at Kileba, which sits 7 km southeast of Kipoi Central, has been traced for 1.3 km. Some of the best results from the last year include 35 metres of 3.09% copper, 37 metres of 2.62% copper, and 44 metres of 1.87% copper.

And at Kipoi North, 1 km north of Kipoi Central, drilling has extended the zone’s strike length to 650 metres, while also identifying new zones of mineralization in the footwall and hangingwall. Important results from Kipoi North include 2.99% copper over 50 metres, 1.93% copper over 54 metres, 2.22% copper over 26 metres, and 2.71% copper over 18 metres.

Tiger recently reached a contract renegotiation agreement for Kipoi with Gcamines, the DRC’s state-owned mining company. Gcamines announced last year that it was renegotiating most of the country’s mining contracts, a decision that left investors leery. But most negotiations, including Tiger’s, have left contracts largely unchanged, save for a few more (albeit not insignificant) payments.

In Tiger’s case, the new contract at Kipoi stipulates Gcamines has the right to a 2.5% royalty on gross sales, down from 4.5% in the previous contract, and added the requirement for Tiger to hand over US$3 million immediately, US$2 million on the beginning of production and US$2 million on the first anniversary of production. The company then has to pay US$35 per tonne of copper in the project’s proven reserves above 200,000 tonnes.

News of the latest drill results from Lupoto left Tiger’s TSX share price unchanged at 3¢ and its ASX share price up half a penny at A10¢. Tiger has 251 million shares outstanding and, as of the end of September, had A$17.6 million in the bank.