Tiger Real Coal are just starting to mine, @ 7 cents at the moment worth giving it a go
Tigers Realm Coal Ltd (ASX:TIG) has commenced the development of Project F Phase One at its Amaam Coking Coal Project located in eastern Russia.
With $23.3 million funding recently secured in a successful rights issue, the company is targeting production for December, 2016.
The company has been applying the funds raised towards completion of a 30 kilometre haulage road, mining equipment and site infrastructure construction works.
Following test work, two North Asian steel companies have already confirmed their technical acceptance of Project F semi hard coking coals subject to trial cargos.
Additionally, confirmation has been received from several other North Asian customers of their potential interest in our Phase One thermal and semi soft coal products.
Background
Two tenements, Amaam and Amaam North, together comprise the Amaam Coking Coal Project, located within 35 kilometres of the Bering Sea coast in Chukotka Autonomous Okrug, far eastern Russia.
Tigers Realm has 80% ownership of Amaam and has recently signed a Heads of Agreement which will see its 80% ownership of Amaam North increase to 100%.
In addition, the company owns 100% of the Beringovsky Port and Coal Terminal, located 35 kilometres to the north east of the Amaam North tenement.
Amaam and Amaam North have combined JORC compliant coal resources of 632 million tonnes with the majority of these resources being of coking coal quality.
Project F within Amaam North has 110.6 million tonnes of coal resources, 16.1 million tonnes of which have already been classified as Product (Marketable) Reserves under JORC.
Tigers Realm aims to commence coal mining late in the fourth quarter of 2016 at Project F: Phase One.
Project F: Phase One update
Phase One is a starter project ahead of an expansion to full Project F at 1+ million tonnes per annum.
The Phase One open pit targets near surface coal reserves located 37 kilometres from the company owned Beringovsky Port.
The capital investment for Phase One is estimated to be US$ 6.6 million expended in two periods and site operating costs are estimated at US$25 per tonne free on board (FOB).
The first stage of road works is 80% completed and is to be finished by November.
Infrastructure construction commenced in early October following the arrival of required construction materials and contractor teams to Beringovsky.
Planned 2016 procurement for Phase One is complete.
To date, work on mining operations has focussed on recruitment, detailed mine planning, and preparations for grade control drilling. The project’s key operational roles are now filled.
Work in the mine area is expected start in early November.
The successful completion of these works according to plan will see first coal mined and transported to the port stockpiles in December 2016.
Analysis
With $17.7 million in cash at the end of the September quarter and development of Project F Phase One underway, Tigers Realm is well positioned to make the transition into a coking coal producer.
This starter open pit project has good potential to generate free cash flow with low operating costs of US$25 per tonne FOB.
Recent spot selling prices ensure a good margin at US$65 per tonne FOB for thermal coal and US$110 per tonne FOB for semi soft coking coal from the nearby port.
Project F has the potential to be one of the world’s lowest cost coking coal producers.
Test work completed by North Asian steel companies confirming the technical acceptance of Project F semi hard coking coals subject to trial cargos further de-risks the project.
Shares in Tigers Realm are trading strongly, up 150% year to date, currently priced at $0.075.
News flow is expected with regard to further development updates at Project F Phase One and grade control, which is expected to commence within two weeks.
With a JORC compliant coal resources of 632 million tonnes within Amaam and Amaam North, Project F is just beginning for Tigers Realm.
Tigers Realm Coal completes road from port to open pit as production looms
Tigers Realm Coal (ASX:TIG) is moving closer to production, as it continues the development of Project F Phase One at its Amaam Coking Coal Project located in eastern Russia.
As of early December, the road from the port to the open pit; new infrastructure including the workshop, office and laboratory; and upgrades to the existing accommodation camp; are complete.
Site works are presently focused on the open pit area where a small waste pre-strip is being excavated ahead of coal mining.
Tigers Realm is expecting to be mining and transporting coal to the port before the end of December.
Coal production at TIG’s Project F commences
First coal has been mined and trucked from Tigers Realm Coal’s (TIG) Project F to the coal stockpiles at the TIG owned Beringovsky Port in Russia.
Following the successful rights issue to shareholders raising US$23.3 million, TIG commenced development works in early August. During a four and a half month period, TIG completed construction of its winter road from the pit to the port, and constructed the site workshop, office, camp upgrades and an analytical laboratory. Additional mining and coal haulage equipment was procured and delivered to the site, and key workforce recruited primarily from the local community and Far East Russia.
In less than four years, TIG has progressed Project F on the Amaam North Licence from resource identification and initial evaluation to production. This achievement is the result of the consistent support of its shareholders, together with the hard work and commitment of its employees.
Coal mining has commenced in a part of the pit where the waste to coal stripping ratio for the first 12 months of production is less than 2:1 (bcm waste : tonne coal). Mining is being carried out with a fleet comprising a 40 t excavator on coal, a 70 t excavator on waste, five 40 t in pit trucks, a grader and two70t tracked dozers. Coal haulage on the winter road from the pit to the port is being undertaken with eight 30 t capacity Scania trucks.
TIG plans to mine and haul coal to Beringovsky port on the winter road until early May. At that time, coal production will temporarily cease and road works will recommence to convert the winter road into an all season road. Following the completion of these works in Q3, coal mining and trucking to the port will recommence at rate of 600 000 tpy.
TIG’s coal sales forecast for the unwashed product in 2017 are estimated at 30 000 t of semi- soft coking coal (SSCC) to the steel sector and up to 220 000 t of thermal coal into the industrial and power generation sector. The 1Q17 SSCC settlement is US$171/t FOB, and the current Newcastle thermal price is approximately US$85/t - basis 6000 kcal/kg NAR.
Phase one of Project F is the first stage of a development plan ,which builds to a 2 million tpy opencast operation which, on the completion of construction of a washing plant, will predominantly produce a semi- hard coking coal (SHCC). 1Q17 hard coking coal (HCC) settlement is US$285/t FOB. TIG’s SHCC, which will be produced post completion of the wash plant, would be expected to sell at an approximate 15 to 20% discount to the HCC price.
