As a result of this, ASX-listed copper producer Tiger Resources is in discussions with major shareholders and senior lenders to address short and medium term cash flow issues.
Tiger Resources said that heap leach production was adversely affected by a reported seepage of process solution from the intermediate leach solution (ILS) pond. The ILS pond is integral to the production of copper from the heap leach circuit and full remedial work will be undertaken at the end of the wet season to bring the ILS pond back to full production levels. In the interim the decant pond has been converted for use as an ILS pond.
Additionally, the wet season (November to April) is further reducing heap performance, by diluting the grade of the pregnant leach solution (PLS) and is negatively impacting copper production from the heaps.
Tiger Resources also reported that in the evening of 15 February 2017 a leak within the heap leach decant pond (which was being used as the interim ILS pond) resulted in the full contents of the pond discharging into the process water pond. The decant pond contents were fully contained within lined dams and there was no release of solution into the environment. Repairs to the decant pond were completed and the decant pond was returned to operation as the interim ILS pond on 20 February 2017. However, while the decant pond was offline the grade of the PLS feed to electrowinning was further reduced, explained Tiger Resources.
Further to this, on 19 February 2017, a lightning strike caused damage to electrical cables feeding one of the grasshopper conveyors and interrupted heap leach stacking operations. Tiger Resources resumed stack in operations on 20 February 2017, with a loss of 32 hours.
Debottlenecking project update
Despite these setbacks, Tiger Resources completed its planned debottlenecking capital works in December 2016. The debottlenecking programme was designed to expand the nameplate copper production capacity at Kipoi from 25 000 tpa of copper cathode to 32 500 tpa.
The capital works completed included the addition of 14 new electro-winning cells, completion of a coffer dam within the footprint of the new tailings storage facility (TSF) and the installation of a tank leach circuit with a design feed rate of 50 tph.
As the commissioning programme of the tank leach facility has progressed, a number of issues have arisen that limit throughput rates. Actions taken during the commissioning period to address these issues are not delivering a performance improvement, said Tiger Resources.
Over the approximately six week commissioning period to date, the tank leach has achieved average throughput rates of approximately 19 tph compared to the design of 50 tph and availability of 74% compared to the design of 90%.
Currently, the tank leach performance is constrained by two major issues.
Firstly, difficulty in recovering, screening, and feeding the tailings material into the front end of the tank leach circuit is resulting in increased material handling costs, reduced throughput rates compared to design, inability to feed material with the designed particle size distribution and is causing damage to pumps and other components at the front end of the circuit.
Secondly, inability to maintain the coarser (sand) size fraction of particles in suspension is further reducing throughput capacity, causing frequent stoppages to clean up settled material from tanks and hoppers and is also causing damage to tank leach circuit components such as the thickeners and pump mixers, according to Tiger Resources.
Tiger Resources does not currently believe the design throughput rate can be achieved without modification to the existing flow sheet and is currently exploring remedial options.
Copper production and cash flow
The combination of tank and heap leach underperformance and recent disruptive events has had a material negative impact on cash flows as a result of reduced revenue, explained Tiger Resources. Copper cathode production for January 2017 was 1 597 t.
Tiger Resources added that copper production and cash flow forecasts cannot be revised until remedial action plans have been developed and this is currently underway.