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Tiger Resources raises $45.6M for Kipoi acquisition

Published: 05:43 01 Sep 2014 EDT

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Tiger Resources (ASX:TGS) has received strong support for both existing and new investors with the completion of the $45.6 million institutional component of its capital raising to acquire the remaining 40% in the Kipoi Copper Project.

With that in the bag, shares were reinstated to official ASX listing today and should trader firmer.

The acquisition offers a low risk opportunity to lift annual production and increase revenues in FY2014 from an asset that Tiger already operates and understands.

Existing shareholders and a number of new domestic and international institutional investors had subscribed for $19.5 million shares placement priced at $0.30 per share and $26.1 million institutional component of the pro-rata non-renounceable entitlement offer.

The retail component of the fully underwritten pro rata accelerated non-renounceable 1 for 5 entitlement offer priced at $0.30 per share to raise a further $27.8 million will open on Friday, 5 September 2014.

Underwriting will be provided by Canaccord Genuity Australia.

Tiger has also secured a funding facility of up to US$100 million with Taurus Mining Finance Fund.

Kipoi Acquisition


Besides increasing production and revenues, the US$111 million acquisition of the remaining 40% in Kipoi will also increase Tiger’s attributable copper reserves to 737,000 tonnes.

Importantly, it cements the company’s future in the DRC as a 50,000t per year copper cathode producer once the proposed expansion of the SXEW facility has been completed.

After completion of the acquisition, Tiger intends to cede a 5% interest in SEK – holder of Kipoi – to the DRC Government to align Kipoi’s mining titles with the DRC Mining Code

The acquisition also elevates Tiger – already the lowest costs producer – to become the fourth largest copper producer on the ASX and its largest copper cathode producer.

Analysis

Both existing and new investors have demonstrated their support for Tiger Resources’ move to acquire the remaining 40% in the Kipoi Copper Project by subscribing for the $45.6 million institutional component of its capital raising.

A further $27.8 million will be raised through the retail portion of the rights issue, which is fully underwritten.

The acquisition of the remaining Kipoi stake becomes an easier sell given that it is a low risk opportunity to increase both production and revenue from an asset that Tiger Resources knows and understands well.

Kipoi also offers further opportunities to grow through near-mine exploration and sourcing plant feed from elsewhere in the Kipoi region.



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