Tigers Realm Coal Limited forecasts FY19 lift in production and sales as Russian mine gears up
EMBARGO DATE: TUESDAY 14 May 2019, 15:30
Melbourne: 14 MAY 2019
ASX-listed miner, Tigers Realm Coal Limited (ASX: TIG), has completed its transition from explorer to producer with strong FY18 production and financial results as well as the affirmation of its FY19 guidance, forecasting increased production and sales volumes.
In just its third year of operation, production at TIG’s Amaam Coal Basin mine in Russia’s Chukotka Autonomous District is forecast to increase from 576kt in FY18 to 680-750kt in FY19. Sales volumes are forecast to increase from 393kt to 650kt-720kt.
The growth forecast comes after a strong FY18 in which TIG posted positive EBITDA of A$15.3million and net operating cash flow of A$8.0 million.
Financial performance highlights from FY18 released ahead of today’s AGM in Melbourne include:
- 131% year-on-year growth in coal production to 576kt
- Revenue from coal sales increased to A$52.3 million
- Net operating cash flow of A$8.0 million
- Annual profit of A$10.9 million.
Forecast growth in FY19 production is supported by significant investments in mining equipment and infrastructure, haulage and port logistics. This includes the delivery of two new 500t barges built in China, and two used 500t barges which will arrive at site in time for the 2019 shipping season.
Medium-term growth drivers include:
- Expansion of Project F mining operations to the Zvonkoye licence area
- Commencement of design works for a coal handling and preparation plant
- Ongoing port reconstruction expected to increase export capacity up to 2Mtpa, through increased on-shore loading and transhipment capability.
Strategy development review and new leadership team underpin growth
Speaking at the AGM, TIG Chairman Craig Wiggill said the company’s strengthening profile confirmed the investment strategy to bring Amaam North’s Project F deposit into production and in so doing change from a junior coal explorer to a developing coal producer with an important role to play in the supply of product to Asian steel and utility markets.
The rapid customer adoption of the coal products currently being exported through the Company’s coal port has illustrated a keyinvestment criteria in that the source diversification for coal customers remains a priority and that this would provide further incentive for growth of TIG’s operational footprint. The long-term goal of full development of the large resource within Amaam Basin remains a target for the future but, as this requires a substantial investment, this will be subject to the company’s further growth and capital access opportunities.
Mr Wiggill paid tribute to the new leadership team, led by CEO Dmitry Gavrilin and CFO Dale Bender, both of whom are in Australia for the AGM. He stated that the new leadership had embraced the growth strategy approved by the board and that they were aligning and adding to the company’s resources, both in terms of capital spend as well as employee competencies, in order to deliver this growth.
Impressive achievements despite unique challenges
Mr Gavrilin told investors at the AGM the positive FY18 results and FY19 outlook would not have been possible without the ongoing support of shareholders.
“TIG has brought a remotely located deposit into production in a very short period of time. From the time we first explored the Amaam North deposits in the winter of 2013/14, it took three years to get into production in January 2017. That is very fast by international standards, especially taking into account the unstable coal market and intricate geopolitical environment TIG has been operating in during those years. We have been ramping up the last two years and expect to sustain our growth rate in the future.”
“Our development involves working closely with the local indigenous communities over both our current and future plans related to operations in the region. This engagement is focused on sustainable development, including supporting local communities’ awareness of and development in the fields of cultural heritage, sport, education, environment and general health and well-being.”
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About Tigers Realm Coal
SX listed Tigers Realm Coal’s (“TIG’s”) vision is to become a significant supplier of high-quality coking coal to the seaborne market through the development of its assets located in the vicinity of the Bering Sea coast in the Russian Far East, Chukotka Autonomous Okrug (District). The two TIG controlled Licences, Amaam and Amaam North, together comprise the “Amaam Coal Project”.
Integral to the realisation of the Amaam North project is the TIG owned Beringovsky Port and Coal Terminal, located 35km to the north east of the Amaam North tenement.
TIG is planning to achieve this goal through gradually realising its resource potential and becoming a meaningful supplier of up to 10 Mtpa of coking coal to the seaborne market via the development of the Amaam Coal project in three stages:
Stage One has commenced and comprises the development of Project F to a 1.0 Mtpa semi-hard coking coal operation, realized through the Beringovsky Port, initially achieving up to 0.6 Mtpa utilising existing infrastructure and mining fleet (Phase One), followed by expansion to 1.0+ Mtpa through construction of a coal handling and processing plant (“CHPP”), in addition to infrastructure, port and mining fleet upgrades. The implementation of Phase One has been achieved through the ongoing support of our key stakeholders, including but not limited to our partners in the Chukotka Autonomous Okrug and our shareholder base, as evidenced through the successful completion of the 1 for 1, fully underwritten Non-Renounceable Rights Issuance in September 2016.
Stage Two is based on production increases from Project F and Amaam North; and Stage Three sees the development of Amaam to full capacity and the establishment of a transportation corridor to a year-round port at Arinay Lagoon Continued targeted exploration aimed at upgrading delineated coal resources and engineering studies, will lay the foundation for the next Stages of the Amaam development.
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