TIDMMTR
Metal Tiger Plc
("Metal Tiger" or the "Company")
Thailand - Receipt of KEMCO Competent Person Report Final Draft,
Mineral Resource Estimate & Valuation Update
Metal Tiger plc (LON:MTR) the London Stock Exchange AIM listed
investor in strategic natural resource opportunities is delighted
to advise that the Company has received the final draft SRK
Consulting (UK) Ltd ("SRK") Competent Persons Report ("CPR")
incorporating an independent Mineral Resource Estimate ("MRE") and
Technical Economic Model ("TEM") for the assets of the Company's
Thai Joint Venture ("KEMCO JV") over the Song-Toh and Boh-Yai
silver-lead-zinc mines (the "Project") located in Thailand.
It is intended that the KEMCO JV assets, along with Metal
Tiger's other Thai exploration assets, will be transferred to KEMCO
Mining PLC ("KEMCO"), which is currently a wholly owned subsidiary
of Metal Tiger.As announced on 7 March 2017, it is intended that
KEMCO will raise further capital and seek admission to trading on
the AIM market of the London Stock Exchange ("AIM"). Post
structuring, upon completion of the asset transfer from KEMCO JV,
80% of the Project will be held by KEMCO, resulting in a circa 78%
effective dividend interest to KEMCO over the Project. The final
CPR is intended to be included in an admission document in relation
to KEMCO's proposed admission to trading on AIM, which is expected
to occur by the end of Q3 2017.
The SRK CPR provides an update to the findings of the
Preliminary Economic Assessment ("PEA") undertaken for the Project
by ACA Howe in 2013. The SRK report incorporates additional
information and data that has become available since 2013, as well
as the independent SRK, JORC Code (2012) compliant, MRE and an
updated TEM.
SRK has reviewed this news release and have consented to its
release. The information in this press release that relates to
Mineral Resources is based on information compiled and reviewed by
Dr Mike Armitage, who is a full-time employee of SRK and a
Competent Person as defined in the 2012 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'.
A summary of the SRK findings and Company comment are provided
below.
Michael McNeilly, Chief Executive Officer of Metal Tiger
commented: "SRK has delivered a high-quality update to the 2013
Preliminary Economic Assessment of the KEMCO mines.Utilising the
significant amount of data that has been compiled by the KEMCO team
since 2013, SRK has independently presented a material Mineral
Resource upgrade and demonstrated the significant value of the
KEMCO Project.
SRK has determined that the Project not only warrants the
further technical work required to commence an optimised reopening,
but holds the potential for significant Mineral Resource increases
and enhancement through ongoing exploration and assessment.
The CPR findings and Mineral Resource upgrade have provided us
with a firm base on which to further improve the Project as we work
through the Thai mine permitting process and develop our knowledge
to a Prefeasibility Study level.
Key Project metrics have seen material improvements since the
previous study; over 85% of the JORC compliant Resource is now in
the Indicated category, denoting a higher degree of certainty;
contained metal has been increased by up to 25%, resulting in a net
12% increase in modelled revenue and operating income (revenue less
deductions and operating costs) up 9% to US$202.5M despite silver
prices falling from a previously modelled US$30/oz to US$20/oz in
the current SRK TEM.
Whilst the Project NPV has fallen, against the 2013 study, to
US$45.9M, sensitivity analysis shows this is largely due to the
increased provision for up-front capital cost and operating costs
based on international dollar terms.The management can see
potential for cost savings by utilising Thai engineering capability
at competitive local rates and will obtain detailed costings for
future valuation updates. We are further encouraged that
sensitivity analysis shows that a modest reduction in operating
costs combined with a recovery in metal prices offers strong
valuation upsides for Project optimisation. Using the 2013 silver
price of US$30/oz has the effect of adding some US$20M to the NPV,
with all other inputs unaltered."
Highlights:
-- KEMCO JV concerns the reopening of existing mines, which are in good
condition with open development, haulage and drainage
drives,
utilising existing processing plant and much of the existing
infrastructure.
-- The Song Toh and Boh Yai silver-lead-zinc mines were put on care and
maintenance in 2002, having been in continuous operation since
1978.
The processing plant last operated in 2008.
-- The 2017 SRK CPR updates and builds on the findings of the PEA
undertaken on the Project by ACA Howe in 2013.
-- SRK has addressed key aspects of the Project, including the MRE and
the major Technical Economic Parameters upon which the
current
development plan is based, to provide an updated TEM and Net
Present
Value ("NPV").
-- SRK utilised KEMCO's newly compiled and updated drill hole databases
to produce a new three-dimensional computer model of the geology
and
orebodies, based on:- 949 drill holes totalling 93,612m
(489 holes/ 43,513m at Boh Yai mine & 460 holes/ 50,099m at
Song Toh
mine).
-- SRK's MRE reports JORC Code (2012) compliant Mineral Resources of:-
Boh Yai: Indicated 2.9 Mt @ 3.7% Pb, 4.5% Zn and 68.4g/t Ag
plus Inferred 0.4 Mt @ 3.5% Pb, 4.2% Zn and 107.2g/t Ag-
Song
Toh: Indicated 1.1 Mt @ 5.1% Pb, 0.8% Zn and 60.1g/t Ag plus
Inferred 0.2 Mt @ 8.1% Pb, 0.2% Zn and 76.4g/t Ag
-- The latest MRE reports more Resource in the Indicated category
than previously (over 85% Indicated), denoting a higher
geological
confidence and providing a more accurate model for mine
planning
purposes.
-- SRK report a higher overall grade though a slightly lower tonnage,
with the Boh Yai orebodies forming the majority of the
remaining
Mineral Resource, albeit as thinner, more variable ore zones
than at
Song Toh.
-- SRK has taken a conservative approach for the MRE; omitting
potentially biased underground development sample data and
allowing
for Resource sterilisation as well as depletion resulting
from
previous mining activity, whilst including some Resource blocks
which
were scheduled for mining at the time of closure in 2002.
-- Modelled Life of Mine ("LoM") net Project cashflow of US$ 121.4M
(pre-finance and post-tax) with:- NPV (10%) of US$ 45.9M (at
01/01/2018)- IRR of 31%- Payback period 4.7 years
from 2018- Mine life scheduled at 14 years-
Production target 275ktpa ore processed, scheduled to
ramp-up
over 3 years.- Total Capital Expenditure ("CAPEX") of US$
50.3M (Project cost US$ 37,7M, Sustaining cost US$ 9,1M and
Closure cost US$ 3,5M).
-- Total Operating Costs of US$ 45.30/t ore processed, with:-
Mining US$ 29.39/t- Processing US$ 13.34/t- General &
Administration US$ 2.57/t
-- Comparing SRK's CPR model with the 2013 ACA Howe PEA study:- SRK
production schedule has slightly lower ore tonnage, though
higher
grades result in more contained metal and consequently
higher
quantities of metal recovered to concentrates for sale.- Net
revenue (i.e. gross revenue less revenue deductions such as
smelter
charges, royalties and transport costs) higher in the SRK model
at US$
355M compared to US$ 317M in 2013.- Overall net project
cashflow
after tax over the LoM is comparable between models,- NPV
(10%)
in SRK analysis is lower at US$ 46M compared to US$ 62M
(2013).
Primarily due to higher upfront capital costs and higher
operating
costs in the current SRK analysis.- SRK TEM utilises metal
price
forecasts, provided to KEMCO by Wood Mackenzie, ACA Howe
modelled
fixed metal prices over the LoM.- Sensitivity analysis shows
strong NPV upside though reducing capital and operating
costs.-
Recovery of the silver price to 2013 level of US$ 30/oz would
add
approximately US$ 20M to the SRK NPV.
-- SRK concludes that while further feasibility work needs to be
undertaken to ensure the mines are developed in an appropriate
manner
and as optimally as possible, SRK considers that the potential
of the
KEMCO Project justifies this further work.
Competent Person Report Overview
SRK has structured the CPR on a technical discipline basis into
sections on Geology, Mineral Resources, Mining Engineering/Design,
Mineral Processing, Tailings Management, Infrastructure, Water
Management and Environmental and Social Management. The SRK report
also contains sections commenting upon Mining Licence aspects, the
history of the assets and summarises the technical-economic
parameters upon which the current Development Plan is based and
presents SRK's NPV valuation based on this.
SRK provided review and assessment of all material technical
issues likely to influence the future performance of the
Project.
SRK set out recommendations for work needed, including the level
of detail and extra work streams to be undertaken to progress the
assets through to the Pre-Feasibility Study ("PFS") and subsequent
Feasibility Study ("FS") stages prior to the potential
recommencement of production.
The CPR summarises the necessary environmental and social
approvals to be prioritised as the studies progress to the next
level, including details of stakeholder engagements and
environmental baselines including water chemistry and water
management.
Company Comment
Metal Tiger and KEMCO management and advisers have considered
the findings of the SRK study in conjunction with the current work
programmes, plans and objectives for the KEMCO JV. The SRK work
provides an accurate and unbiased summary of the opportunity
potentially offered through the reopening of the Boh Yai and Song
Toh mines. SRK has, rightly, presented a conservative view of the
capital costs likely to be required ahead of any
recommencement.
SRK has worked in conjunction with the KEMCO onsite team to
improve the understanding of the deposits through the digitisation
of the historical mine plans and sections and compilation of
historical drilling and assay data. The resulting new
three-dimensional model of the ore bodies has facilitated a greater
understanding of the mineralisation geometries enabling more
geological certainty in the Resource estimation process, hence
enabling the proportion of Resource in the Indicated category to be
increased to over 85% Indicated, up by 42% on the proportion in the
2013 Resource Estimate.
The creation of the 3D model has, in turn, enabled SRK to make
more informed assumptions regarding the required mining
methodologies and the extent of underground development required to
optimally extract the ores, especially at Boh Yai. These
assumptions have allowed a greater degree of accuracy in the
operating cost estimation for the TEM and current valuation.
The 3D model, with its drill string plots, also serves to
illustrate the yet untested upside exploration potential of the
mines. Much of the mineralisation remains untested at depth with
mineralisation open in a number of locations. Specifically, at Boy
Yai, the area under Khao Bo Rae mountain, between Hill #11 and
Hills #4/5 has not yet been drill tested and the mineralisation at
Hill #4 holds potential for additional Mineral Resources.
There is also the potential to add significant upside to the
Mineral Resource through detailed underground mapping and sampling,
further improving the confidence in, and potentially the
categorisation of, the Mineral Resource, ahead of any major
exploration drilling commitment.
Through the upgrade of the existing mineral processing plant and
the potential addition of modern ore-sorting technologies it is
anticipated that lower grade material could be exploited offering
the Project higher economic efficiencies.
It is noteworthy that the SRK capital cost estimates are all
given in United States Dollar terms. Recognising that these
estimates are rightly conservative and based on SRK's international
experience, Metal Tiger sees the opportunity of significantly
reducing budget estimates through the use of Thai contactors and
technical capability that is available at a discount to
international rates.
Next Steps
KEMCO is working with SRK to put in place the various work
programmes required to take the level of understanding to a PFS
level and ensuring that the PFS elements meet or exceed the level
required for successful mine permitting.
KEMCO will be liaising with Thai engineering firms with a view
to scoping domestic cost inputs for the various capital cost
elements such as the processing plant refurbishment and
facilitation of plant upgrade works and the water and tailings
management infrastructure.
In its financial modelling, SRK has presented a Net Present
Value (NPV) of the Project using a 10% discount rate. The Company
will specifically be addressing the various factors which offer the
potential to reduce the appropriate discount rate, including, the
permitting risk and finance risk through engagement with the
governmental authorities and Asian finance and off-take
providers.
CPR Key Components
The key components of the CPR are outlined below:
1.SRK Mineral Resource Statement
The SRK independent Mineral Resource Estimate ("MRE") has been
reported for Boh Yai and Song Toh in accordance with JORC Code
(2012) guidelines. The SRK MRE (see Table 1.1 below) is based on a
3D geological model of individual veins which was facilitated by
database work compiled by the KEMCO team since 2013. The KEMCO
databases provide varying data for 949 drill holes totalling
93,612m (489 holes/ 43,513m at Boh Yai and 460 holes/ 50,099m at
Song Toh).
SRK's Mineral Resource has an effective date of May 2017 and
comprises:
Boh Yai: Indicated 2.9 Mt @ 3.7% Pb, 4.5% Zn and 68.4g/t Ag plus
Inferred 0.4 Mt @ 3.5% Pb, 4.2% Zn and 107.2g/t Ag
Song Toh: Indicated 1.1 Mt @ 5.1% Pb, 0.8% Zn and 60.1g/t Ag
plus Inferred 0.2 Mt @ 8.1% Pb, 0.2% Zn and 76.4g/t Ag
The ACA Howe MRE (November 2012) consisted Indicated 2.90Mt @
3.57% Pb, 2.82% Zn & 72.63g/t Ag plus Inferred 1.96Mt @ 2.95%
Pb, 3.08% Zn & 48.89g/t Ag and was reported in accordance with
Canadian Institution of Mining (CIM) Standards based on a 3.0% Pb
Equivalent cut-off.
SRK has been able to report more Resources in the Indicated
category than was previously the case.
SRK overall report a higher grade though a slightly lower
tonnage, with the orebodies at Boh Yai forming the majority of the
remaining Mineral Resource, albeit as thinner, more variable
orezones than at Song Toh.
Table 1.1: Mineral Resource Statement (SRK, May 2017)
JORC Class Mt Ag (g/t) Pb (%)* Zn (%)* Fe (%)* Hg (g/t)*
Boh Yai
Indicated 2.9 68.4 3.7 4.5 0.4 24.8
Inferred 0.4 107.2 3.5 4.2 0.3 40.7
Total 3.3 72.6 3.7 4.5 0.4 26.5
Song Toh
Indicated 1.1 60.1 5.1 0.8 1.6 8.7
Inferred 0.2 76.4 8.1 0.2 2.6 12.9
Total 1.3 62.6 5.5 0.7 1.8 9.4
* Grades given are mean grades.
In reporting the Mineral Resource Statement, SRK notes the
following:
-- Mineral Resources have an effective date of May 2017. The Competent
Persons for the declaration of Mineral Resources is Dr Mike
Armitage,
an employee of SRK. The Mineral Resource estimate was prepared
by a
team of consultants from SRK;
-- Reported Mineral Resources are below the un-mined topography but
exclude areas that SRK considers to have been mined out or
sterilised
by previous mining;
-- The reported Indicated Mineral Resource includes some 190 kt of
material in areas blocked out for mining by KEMCO and within
areas
previously mined.
-- Mineral Resources are reported as undiluted. No mining recovery has
been applied in the Statement; and
-- Rounding as required by reporting guidelines may result in apparent
summation differences between tonnes, grade and contained
metal
content.
Resource Depletion
In compiling its independent MRE SRK has taken a conservative
approach, omitting underground development sample data from the
interpolation process until a study of potential positive grade
bias can be completed. This data could be incorporated into the MRE
for the PFS, and will allow better local grade estimates to be
derived.
Mining records report that 5.3Mt was mined in the period
1978-2002; 4.5Mt at Song Toh and 0.8Mt at Boh Yai. In completing
the current MRE SRK removed 1.14Mt from the Camp section of Song
Toh and 0.8Mt from Boh Yai, based on denoting a level of confidence
to resource blocks potentially previously exploited as judged from
available sections and plans. Where resource blocks could be shown
as being ready for mining but still unexploited when mining ceased
in 2002, they were included in the SRK estimate.
2.Mining Summary
The SRK study considers Room-and-Pillar ("R&P") and Overhand
Open Stoping ("OOS") as the future mining styles in line with
previous operations with R&P utilised in the thicker,
relatively shallow dipping orezones and OOS planned for the steeper
dipping and relatively thin orezones. The mining recovery factor is
assumed as 80% and dilution at 12%.
Diesel powered mobile mining equipment is modelled for ore
cleaning and transport, with hydraulic jumbo drill rigs utilised
for waste development and pneumatic hand-held drills for ore
horizons. The existing mine development constrains the size of the
mining equipment, with the number of units geared by LoM
predictions for the number of concurrent stopes and development
ends required to be in production, rather than just the level of
production.
Historical production records show that the Boh Yai orebodies
necessitated significantly more development than the Song Toh
orebodies, with the Boh Yai mineralised bodies generally being
thinner and more discontinuous. Boh Yai is modelled as having a
higher development requirement and smaller average stope size.
The CPR sets out parameters for development, ventilation and ore
transport with the current LoM scheduled at 14 years.
The current KEMCO production target is 275ktpa ore processed,
scheduled to ramp-up over 3 years. For mine production scheduling,
the SRK Mineral Resource has been converted into ore-types based on
concentrate products; Boh Yai high >2% & low <2% Zn; and
Song Toh high >1% & low <1% Zn. SRK scheduled the ore
tonnes and grade by ore type in an Excel model. Approximately 55%
of the current Mineral Resource is located above the level of the
mine dewatering drives.
The total workforce required is modelled at 234 people including
15 at a managerial/senior technical level.
At full production, the average unit mining cost is US$ 28/t
increasing to US$ 29.6/t after 8 years when the Song Toh orebodies
are depleted.
The unit cost difference supports further exploration at Song
Toh to extend the life, and / or consider higher production
contributions for Song Toh.
The mining capital cost over the LoM is given as US$ 22.1M
including 15% contingency. Mining sustaining capital costs
estimated at US$6.8M over the LoM averaging some US$620kpa.
3.Mineral Processing
The mineral processing involves conventional crushing, milling
and floatation to produce a Pb concentrate, a bulk Pb-Zn
concentrate and a Zn concentrate, either concurrently or
individually according to the ore received. The existing processing
plant is located at the Song Toh minesite and has a capacity rated
at 300ktpa. SRK has assumed an annual processing throughput of
275ktp for the purposes of the TEM and valuation.
No recent mineral processing or metallurgical studies have been
carried out. However, historical process statistics show that the
plant achieved good Pb recoveries and concentrate grades, with SRK
utilising the detailed plant production records, produced between
1996 and 2002, to derive TEM assumptions of:
Pb recovery 79-87% for a 69-75% Pb concentrate.
Zn recovery 80% for a 58% Zn concentrate.
Further modifiers have been derived from work undertaken during
1984 as part of a previous PFS, including metallurgical testwork,
ore milling characterisation and ore grade ratio studies. It is
noteworthy that the Boy Yai ores were found to require 25% more
milling energy than the Song Toh ores.
Ore from both mines shows considerable variety in terms of Pb,
Zn and Ag grades and in impurities such as Fe and Hg.
SRK recommends that grinding characteristics for both ores will
be required for the PFS to verify that installed power is suitable
for the entire LoM requirements. Metallurgical testing should also
be conducted to optimise operating parameters and improve
metallurgical performance. The possibility of utilising modern
automated sorting technology should be investigated as it may offer
the opportunity to exploit lower grade ores.
The existing plant was previously inspected for the purpose of
estimating refurbishment costs in 2012. Considering the findings of
this previous audit and taking into account SRK's own experience
and observations with regard to the state of the plant, SRK has
made a provision of US$ 2M for plant refurbishment and replacements
to be spent 6 to 12 months prior to re-commissioning.
The SRK average unit operating cost for the operation and
maintenance of the concentrator and the tailings facility over the
LoM is given as US$ 13.34/t.
4.Tailings Management
The existing tailings storage facility ("TSF") is adjacent to
the processing plant at Song Toh and consists a valley style
impoundment containing approximately 5Mt of tailings. The plan is
to upgrade this facility to store additional tailings produced when
the plant is re-started.
A previous Golder Associates study has presented conceptual
plans for a series of upstream rises on the TSF. These have been
incorporated into the current study, with the upgraded facility
modelled as having sufficient capacity to contain 3.5Mt of tailings
representing 13 years' production at average throughput.
Provisions are included to bring the design of the TSF dam
within international guidelines on dam safety, with buttressing of
the main embankment and a series of upstream raises designed to
accommodate a rate of tailings rise of 1 metre/yr.
SRK sets out recommended field studies including
characterisation for the existing tailings for stability, buttress
stability, detailed water balance modelling and factoring in the
influence of the wet season rains and the possible interaction with
the karstic ground conditions (sinkholes and caves).
The capital cost of upgrading the TSF is modelled at US$ 3.46M
plus sustaining capital of US$ 0.64M spread over the LoM.
5.Water Management
The CPR sets out considerations and recommendations for surface
and underground water management, including hydrology of the karst
environment, water quality monitoring, mine dewatering, surface
water management, water requirements and balance and water
treatment.
With a proportion of the scheduled Resource located below the
existing haulage/drainage drifts in both mines, conceptual
sub-level drainage development, sumps and pumps are factored into
the current model.
At Song Toh, it is envisaged that a new dewatering drive would
be established 150m below the existing drift whilst at Boh Yai the
deepest new dewatering drive would be located 220m below the
existing haulage/dewatering drift.
A provision of US$ 4.85M is given as the capital cost for a
complete water handling and treatment facility to address plant
water requirements, water recycling and water discharge within
permitted environmental criteria.
6.Infrastructure & Logistics
Provisions and recommendations are given for the use and upgrade
of existing mine and camp infrastructure, haulage road
improvements, fuel, water and power requirements and provision of
new medical, firefighting, security and loading equipment and
facilities.
The use of the 15km long haul road between the Boh Yai mine and
the Song Toh processing plant has been scheduled as part of the
model. There is an assumption that capital works are not required
for local or national roads and that contractor haulage operations
(from Song Toh to port) include a provision of equipment,
facilities and labour.
For the study the concentrate is modelled as being shipped in
bags stuffed within containers to off-taker smelters in Korea or
China. Utilising haulage contractors to undertake the necessary
transport and rehandling of concentrate bags between the mine site
and port, to take into account various road weight restrictions
(necessitating possible concentrate bag re-handling/packing) en
route.
Infrastructure related capital costs which have been developed
in conjunction with KEMCO amount to US$ 4.315M.
7.Environmental and Social Permitting and Baseline
Requirements
The new Thai Mineral Act (B.E.2560 (2017)) will come into effect
on 29 August 2017. It is anticipated that there may be a period of
interpretation and adjustment to the existing KEMCO mining lease
applications and existing land-use applications for the setting
ponds, processing plant and TSF, with corresponding possible delays
to the approvals process. Remaining documents for the approval
process are currently under preparation by KEMCO.
As part of the planned PFS, SRK recommends that KEMCO expands
the Environmental Health Impact Assessment ("EHIA") process for the
Project in accordance with Thai Environmental Impact Assessment law
and International guidelines, and in line with overall Project
development stages. Baseline studies should be continued through
the PFS / FS process with some activities critical for the
provision of data for the EHIA, Mine Plan and Licence Application
procedures. Though beyond legal requirements, SRK also recommends
that KEMCO continue to build a strong and stable relationship with
local stakeholders and potentially hostile NGOs.
8.SRK Valuation
SRK constructed an Excel based Technical Economic Model ("TEM")
to assess the viability of reopening the Song Toh and Boh Yai
mines, based on the technical and economic parameters of the
Project through analysis of historical performance data,
benchmarking and/or escalating of costs derived from previous
studies. The model considers a corporate tax rate of 20% assumed
with straight-line depreciation over 5 years and tax losses carried
forward and offset against future profits and VAT applied at 7% on
100% of capital costs ("CAPEX") and 75% of operating costs
("OPEX"), with VAT recoverable in 45 days. The constituent elements
of the TEM include:
-- Mining & Processing schedule based on the SRK Mineral Resource
Estimate as modified for assumed mining recovery and
dilution
parameters
-- Process recovery and concentrate parameters
-- Smelter terms
-- Mining OPEX & CAPEX
-- Processing OPEX & CAPEX
-- Tailings OPEX & CAPEX
-- Infrastructure CAPEX
-- Owners development and business services cost
-- Closure costs
The TEM results in a Project LoM net cashflow (pre-finance and
post-tax) of some US$ 121.4M which returns a NPV (10%) of US$ 45.9M
(at 01/01/2018) and an IRR of 31%. The payback period from 2018
would be 4.7 years.
In comparison with the 2013 PEA conducted by ACA Howe, the
latest production schedule has slightly lower ore tonnage, however
due to higher grades in the current model there is more contained
metal and consequently higher quantities of metal recovered to
concentrates for sale.
Whilst lead prices remain comparable between the two models, the
current zinc price profile is higher than it was in 2013 whilst the
currently modelled price of silver (US$ 20/oz) is significantly
below that used in 2013 (US$ 30/oz).
Because of the higher metal recovered for lead and zinc in the
current model, gross revenue for both lead and zinc is higher than
the 2013 analysis. Despite higher silver recovered to concentrates
in the current model, the markedly lower silver price results in a
net decrease in silver revenues compared to 2013.
While overall revenue deductions (smelter charges, royalty,
transport charges) are proportionally higher in the current model
(due to higher overall gross revenue), the net revenue remains
higher in the current model at US$ 355M compared to the previous
2013 analysis of US$ 317M.
Operating and capital costs are higher in the current model
through a combination of general escalation and re-estimation by
SRK.
Overall net project cashflow after tax over the LoM is
comparable between models, however the NPV (10%) in the current
analysis is lower at some US$ 46M compared to the previous 2013
model of some US$ 62M. The primary reason for the decrease in NPV
in the current model, despite comparable LoM undiscounted cashflows
between models, is due to the higher upfront capital costs and
higher operating costs in the current SRK analysis.
Details of the mine and plant scheduling, concentration
production, capital and operating costs and summary cashflows are
outlined in appended tables below.
9.SRK Conclusions & Recommendations
The SRK CPR concludes that while further technical work needs to
be done to ensure the mines are developed in an appropriate manner
and as optimally as possible, SRK considers that the potential of
the assets justifies this further work.
Notably, the NPV and IRR for the assets presented demonstrates
the value of the Project and this has potential to be enhanced
further particularly given the potential for the Mineral Resource
to be increased following ongoing exploration and assessment.
Recognising further technical work is required in most areas of
study, to bring the level of confidence up to PFS level and enable
the reporting of an Ore Reserve, SRK sets out recommendations on
the key aspects of this work to take the project to the next
level.
10. Competent Person Statement
The information in this press release that relates to Mineral
Resources is based on information compiled and reviewed by Dr Mike
Armitage, who is a full-time employee of, and Corporate Consultant
with, SRK Consulting (UK) Ltd and is a Member of the Institute of
Materials, Minerals and Mining (MIMMM), a Fellow of the Geological
Society of London (FGS), a Chartered Geologist of the Geological
Society of London (CGeol) and a Chartered Engineer, UK (CEng).
Dr Armitage 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 2012 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves'.
Dr Armitage has consented to the inclusion in the press release
of the matters based on his information in the form and context in
which it appears.
Appendix: Selected SRK Technical Economic Model Inputs and
Output Tables
LoM Mine / Plant Schedule
Plant Feed 3,374,387 t
Metal Grades Contained Metal Plant Recovery & Conc. Grade Commodity Prices
Pb 4.16 % 140,382 t Scheduled by ore type, moisture content 8%. Pb US$ 1.00 /lb
Zn 3.42 % 115,367 t Zn US$ 1.63 /lb
Ag 69 g/t 231,901 kg Ag Ag US$ 20 /oz
7,455,797 oz Ag (variable in model, 2019 given above)
Fe 0.65 %
Hg 21 g/t
LoM Concentration Production
Concentrate Production Concentrate Grade Contained metal
(conc. ave.)
Pb Total tonnage (wet) 175,821 t Pb 70.99 % Pb 114,822 t
Zn 8.26 % Zn 13,357 t
Ag 1,073 g/t Ag 173,619 kg
Fe 1.37% (Ag 5,581,970 oz)
Hg 112 g/t
Total tonnage (dry) 161,755 t
Zn Total tonnage (wet) 150,422 t Pb 4.1 % Pb 5,678 t
Zn 57.01 % Zn 78,898 t
Ag 123 g/t Ag 16,975 kg
Fe 0.61% (Ag 545,747 oz)
Hg 192 g/t
Total tonnage (dry) 138,388 t
Smelter Terms
Smelter Terms Units Pb Conc. Zn Conc.
Lead/Zinc Pb Zn
Pay for Pb/Zn (%) 95.0% 85.0%
Minimum Deduction (%) 3.0% 8.0%
Treatment Charge (USD/t conc. dry) 220 250
Base Price (USD/t) 2,500 2,500
Escalator Charge (USD/t conc. dry) 0.06 0.05
De-escalator (USD/t conc. dry) - 0.04 - 0.02
Truck transport (USD/t conc. wet) 26 26
Shipping (USD/t conc. wet) 34 34
Silver
Pay for (%) 95.0% 70.0%
Minimum Deduction (g) 50 100
Refining charge (USD/oz payable) 1.00 1.00
Metal Prices
Metal Price Forecasts used by SRK (2017 TEM),provided to KEMCO by Wood Mackenzie
Metal Units 2017 2018 2019 2020 2021 2022 2023 2024 LTP
Lead (USD/lb) 1.04 1.05 1.00 0.98 0.98 0.95 0.93 0.91 1.02
Zinc (USD/lb) 1.46 1.72 1.63 1.35 1.14 1.07 0.96 0.94 1.22
Silver (USD/oz) 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00
Metal Price used in 2013 PEA
(ACA Howe)
Metal Units Fixed at
Lead (USD/lb) 1.00
Zinc (USD/lb) 0.95
Silver (USD/oz) 30.00
Royalties
Royalty Metal Prices To (Baht) Royalty Rate (%)
From (Baht)
Lead - 8,000 2%
8,000 12,000 5%
12,000 20,000 10%
20,000 999,999 15%
Zinc - 10,000 2%
10,000 20,000 5%
20,000 30,000 10%
30,000 999,999 15%
Silver 10%
LME freight rate (USD/t metal) 75.00
Capital Costs
Initial Project / Refurbishment Capital Costs Total
(USD '000)
Feasibility & Permitting 750
Owners 250
Plant refurbishment 2,000
Water treatment plant 4,850
TSF 3,460
Infrastructure 4,315
Mining 22,077
Total 37,702
Capital Costs Total
(USD '000)
Project 37,702
Sustaining 9,098
Closure 3,470
Total 50,270
Project Revenue
Revenue Summary Total
Conc. Type (USD '000)
Lead 236,893
Zinc 178,911
Silver 106,596
Gross revenue 522,401
Smelter charges 74,907
Penalties -
Transport costs 19,575
Royalty 72,523
Net Revenue 355,397
Operating Costs
Operating Costs (USD'000) (USD/t)
Mining 99,190 29.39
Processing 45,001 13.34
General & Administration 8,669 2.57
Total 152,860 45.30
* per t processed
Summary Project Cash Flow
Project Cash Flow Total(USD '000) Total(USD '000)
(2017 TEM) (2013 PEA)
Revenue 355,397 317,463
Operating costs (152,860) (131,266)
Operating Profit 202,536 186,196
Capital costs (50,270) (37,192)
Corporation tax (30,894) (30,124)
Working capital (0) 0
Net Project cashflow 121,372 118,880
NPV (10%) 45,941 61,642
Net Present Value
NPV 2017 TEM Total(USD '000)
Discount rate
6% 67,708
8% 55,820
10% 45,941
12% 37,674
14% 30,712
Sensitivity Analysis
Sensitivity -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
of NVP
10
%
(USD'000)
by:
Revenue -43.6 -22.7 -4.2 12.9 29.6 45.9 62.2 78.3 94.2 110.1 126.0
OPEX 77.5 71.2 64.9 58.6 52.3 45.9 39.6 33.3 27.0 20.6 14.2
Capital 63.0 59.6 56.2 52.8 49.4 45.9 42.5 39.1 35.6 32.2 28.7
Cost
The technical information contained in this disclosure has been
read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, FGS), who
is a qualified geologist who meets the criteria of a qualified
person under the AIM Rules - Note for Mining and Oil & Gas
Companies.Mr O'Reilly has visited the Project site. Mr O'Reilly is
a consultant working for Mining Analyst Consulting Ltd which has
been retained by Metal Tiger PLC to provide technical support.
For further information on the Company, visit:
www.metaltigerplc.com:
Michael McNeilly (Chief Executive Officer) Tel: +44(0)20 7099 0738
Keith Springall (Finance Director & Tel: +44 (0)20 7099 0738
Company Secretary)
Sean Wyndham-Quin Spark Advisory Partners Tel: +44 (0)20 3368 3555
Neil Baldwin Limited
(Nominated Adviser) www.sparkadvisorypartners.com
Nick Emerson SI Capital Tel: +44 (0)1483 413 500
Andy Thacker (Joint Broker)
Andrew Monk VSA Capital Limited Tel: +44 (0)20 3005 5000
Andrew Raca (Joint Broker)
Gordon Poole Camarco Tel: +44 (0)20 3757 4980
James Crothers (Financial PR)
Notes to Editors:
Metal Tiger plc is listed on the London Stock Exchange AIM
Market ("AIM") with the trading code MTR and invests in high
potential mineral projects with a precious and strategic metals
focus.
The Company's target is to deliver a very high return for
shareholders by investing in significantly undervalued and/or high
potential opportunities in the mineral exploration and development
sector timed to coincide, where possible, with a cyclical recovery
in the exploration and mining markets. The Company's key strategic
objective is to ensure the distribution to shareholders of major
returns achieved from disposals.
Metal Tiger's Metal Projects Division is focused on the
development of its key project interests in Botswana, Spain and
Thailand. In Botswana Metal Tiger has a growing interest in the
large and highly prospective Kalahari copper/silver belt. In Spain
Metal Tiger the Company has tungsten and gold interests in the
highly-mineralised Extremadura region. In Thailand Metal Tiger has
interests in two potentially near-production stage silver/lead/zinc
mines as well as licences, applications and critical historical
data covering antimony, copper, gold, silver, lead and zinc
opportunities.
The Company has access to a diverse pipeline of new
opportunities focused on the natural resource sector including
physical resource projects, new natural resource centred
technologies and resource sector related fintech opportunities.
Pipeline projects deemed commercially viable may be undertaken by
Metal Tiger or by an AIM or NEX Exchange (formerly ISDX) partner
with whom the Company is engaged.
Note: This announcement contains inside information which is
disclosed in accordance with the Market Abuse Regulation.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20170613005790/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
June 13, 2017 08:11 ET (12:11 GMT)
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