TMR - Tamaya Resources

[chris1983]

Keep an eye on this one. Formally known as SMO. Name change in effect today.

They have a producing mine in Chile. Good exploration tenements in and around Charters Towers, north Queensland. They have no debt. They are funding and expansion of their Puntaqui mine in chile with existing cash flow.

Great management team.

 

[Impala]

Quite right Chris! And the reason they've got a good management team is because they've also got a great board. Not the usual bunch of variable quality geologists. They moved rapidly and effectively when Chilean operations didn't perform satisfactorily. Not sure why Richard Palmer sold 8m shares recently, but he did hold a swag of them, and there was a ready institutional buyer. I think Tamaya is another Oxiana.

 

[bigt]

TMR taken quite a hit in the last month or so...slowly trending down. Any opinions on why this is occuring? Strong copper price should keep this moving up?

 

[oliverwinchester]

Article posted in two sections due to size:

December 2006 RESOURCESTOCKS

COVER STORY

Resurrection of the year - Winner SMC Gold

The Resurrection of the Year is one of the most interesting Best of the Best awards, recognising a company that has made the best comeback over the preceding 12 months.
Whether it be a change in management, a change in commodity focus, the overcoming of an operational impediment or a combination of factors, a number of miners and explorers again managed to haul themselves off the canvas this year to be worthy nominees for the Resurrection of the Year award.

Turning gold into copper

The worthy winner of the award is SMC Gold, which has reinvented itself from being a Queensland-focused gold explorer to a successful Chilean-based copper-gold miner.

The resurrection of SMC Gold is startling as much for the transformation that has come over the company, as for the timeframe it has occurred in.

The company's operations in Chile are centred on its Cinabrio mine and Punitaqui processing plant around 400km north of Santiago, and much of the credit for the turnaround in SMC Gold's fortunes can be attributed to its new management team headed by chairman Hugh Callaghan and managing director Mike Fischer.

Callaghan joined the company in late June, initially as non-executive chairman before becoming executive chairman. Since that time, Fischer and Steve Playford (general manager, Chile) have been appointed, and more recently Rio Tinto veteran Jim Squire became a director.

The new team has presided over an increase in production from its Chilean copper operations, and a corresponding rise in profits and decrease in operating costs.

In the September quarter, SMC's consolidated earnings before interest and tax increased 10.2% to $A3.65 million on the back of a 20.4% rise in copper production at the Punitaqui operation.

Cash costs for the quarter dropped from $US 1.82 to $1.58 per pound copper.

Australian Executive of the year

2nd place - Hugh Callaghan, chairman SMC Gold

The Executive of the Year is one of the premier "gongs" in RESOURCESTOCKS' annual Best of the Best awards, and has previously been won by such industry notables as Oxiana's Owen Hegarty, and Tony Palmer.

Up and comer

Apart from being particularly happy to see Harmanis take out first place in the Executive of the Year award, the Best of the Best judges were also well satisfied to see Hugh Callaghan recognised as the runner-up in the award.

Callaghan may not be as high profile as some of the other nominees, but his efforts in transforming SMC Gold from a Queensland-focused gold explorer to a copper producer with its operations centred on Chile make him a worthy nominee in a heavyweight field.

Callaghan has previously revamped Sydney-based, African-focused coal miner Riversdale Mining, where he was the managing director, and he has now turned his considerable talents to SMC Gold.

Commencing with SMC Gold in June, Callaghan's achievements in such a short period of time have been remarkable. So much so that under his leadership SMC Gold was named winner of the Best of the Best Resurrection of the Year.

In the past Callaghan has worked in a variety of roles for Rio Tinto and Xstrata, and has specific expertise in the copper industry which has included working with major copper operations around the world.

This has seen him work as part of the management team at the largest copper mine in the world, the Escondida copper mine in Chile, and his combined knowledge of both copper and Chile make him the ideal candidate to lead the transformation of the company.

The market has also caught on to the Callaghan-led reinvigoration of the company, with its share price nearly tripling from the middle of the year, to 24c on November 8.

CORPORATE PROFILE

SMC rides high on Improved copper prices and Increased production

One Australian junior is showing that with the right strategies and the appropriate mining experience and expertise there are commercial opportunities to be pursued in overseas markets, even for small caps. By Lou Caruana.



With its Chilean operations well into production and already generating cash flow in excess of $5 million a quarter, copper-gold producer SMC Gold has captured the attention of the market recently, thanks in part to the soaring commodity prices that have been a boon for the whole sector.

Currently, the company owns a copper�gold project 410km north of Santiago, Chile, comprising the Cinabrio mine and the Punitaqui processing plant, with other copper and gold resources under development.

It also has gold exploration on gold tenements over 268 square kilometres in the historic and highly prospective Charters Towers goldfield region of northern Queensland.

However, the company's focus is now squarely on Chile.

In fact, shareholders have been asked to vote on a new name - Tamaya Resources Limited - that reflects its renewed focus on Chile and its copper-gold deposit that sits on the Atacama trend.

Recently appointed executive chairman Hugh Callaghan believes that Chile is a mining destination waiting to be discovered by junior mining companies. "It has a developed mining culture with top flight engineers graduating from the country's engineering schools. Its sovereign risk is low, and above all else it has a marvellous geological endowment."

While BHP Billiton has had its share of industrial problems at Escondida, SMC has negotiated a 40-month wage agreement with its workforce. Callaghan said that there is no skills shortage in Chile and that the agreement negotiated was competitive internationally.

Within Chile, the location of SMC Gold's operations is also ideal, with access to water, power, and qualified and trained people as well as a sound transport infrastructure.

The company's managing director, Michael Fischer, is also passionate about the Latin American team he has gathered around him. He is part of a new board and management team that has breathed fresh air into SMC since joining in June 2006, and given the listed miner a new direction and tighter operational focus.

Callaghan - chief architect of the company's transformation - has put together a tight team of Australian mining professionals with years of experience in optimising mining performance behind them.


"We already have some quick runs on the board, which we have achieved through disciplined management of basic processes," said Callaghan, a mining industry executive with senior level experience with the likes of Xstrata and Rio Tinto, including work in Chile at the giant Escondida copper mine.

With a market capitalisation of around $115 million, SMC Gold is still a small cap, but intent on leveraging its unique position in the underexplored Andes to grow through strategic acquisition and increased plant throughput.

"We believe in leverage," Callaghan told RESOURCESTOCKS. "The concept of leveraging a balance sheet, a portfolio of assets and our cash flows is central to our corporate strategy.
"Our first step is to consolidate the business and to ensure that we are driving the metallurgical performance of core assets to deliver good cash flow and a sound platform for growth.
"We will then leverage this position to access new opportunities. It's a simple model, and one that lends itself well to our operations in Chile."

Callaghan was previously part of the Riversdale Mining executive team that established a similar model in South Africa with an anthracite coal mine. He will again be applying this model to SMC Gold as part of a strategy to turn it into a mid-tier status copper-gold producer within two years.

The company has no shortage of growth options already in the pipeline.

The lack of a local mid-tier exploration and mining sector has left the South American nation underexplored, according to Callaghan. This has provided the opportunity for SMC, and the company is targeting the acquisition of a copper resource capable of producing between 32,000 and 40,000 tonnes per annum over a 20-year period.

 

[oliverwinchester]

Continued......

"In Chile, we have the opportunity of the mine expanding either organically or through acquisition. I am confident our next project will be a real company maker, it's just a matter of timing," said Callaghan.
Conscious of its impact on shareholder value, the model to be applied by SMC management consists of augmenting cash flow and improving the resource base without having to go to capital raisings.

The company is generating cash from its mine in Chile and has $2 million in the bank, with a further $3.5 million in revolving credit. To fund further expansion and acquisition, it is also negotiating with financial institutions for further or alternative debt facilities.

In short, SMC will not need to dilute shareholders' investments in order to expand production and to drive shareholder value through strategic acquisitions.

Since joining SMC the new management team has raised the financial and operational performance of the company, lifting profitability from $3.32 million in the June quarter to $3.65 million in the September quarter. It has also lifted copper concentrate production by 20.3% to 989t for the September quarter and increased recovery. Cash costs fell from $US 1.82 to $US 1.58/lb payable copper, a reduction of 13.2%.

Resource estimates have been revised at Cinabrio.

Resources have been estimated at 7.85 million tonnes grading 1.63% total copper, including 0.10% soluble copper, at a cut-off limit of 0.6% copper. To expand on this, SMC will be spending $US 1.8 million on exploration around its existing tenements, and is also developing a pipeline of projects.

The company is also negotiating with small landholders, prospectors and artisanal miners to acquire nearby tenements that have yet to be fully explored.

In the short term the upgrading of the current Punitaqui plant facility to mill 1250 tonnes of ore per day, by enhancing crushing and milling capacity and significantly upgrading flotation capacity, is critical to Punitaqui's future to enable both the treatment of the harder ores from Cinabrio and improve copper recovery to 80%.

SMC has budgeted $4.2 million for the initial upgrade project which is being funded entirely out of cash flow and will produce throughput of more than I 250tpd by December 2006.

This upgrade will then enable the planning of an additional upgrade that will push mill throughput to 2500tpd milled by introduction of SAG milling, and additional flotation and tailings capacity at the Punitaqui site.

Expansion to 2500tpd is expected by the end of calendar 2007, with project scoping to be started by the end of calendar 2006.

SMC has identified three critical performance indicators: daily plant throughput; copper recovery rates; and cash costs.

This focus has already seen an increase in daily plant throughput and a 12.6% improvement in total ore milled for the September 2006 quarter due to improved supervision and management. The December quarter will see a further 26% improvement to a targeted 1250tpd throughput, which will be achieved once upgrades are completed to the crushing, milling and flotation circuits.

Flowing from the upgrade, increased recoveries and concentrate grade improvements, with higher throughput, have a multiplier impact on earnings, according to Callaghan.

He said an 11.3% improvement in copper recoveries to 80% is expected in the March 2007 quarter, when the current plant expansion project is completed and both the rougher tail re-grind mill and the final concentrate re-grind mill are both commissioned along with the new flotation circuit.

Improvement of recoveries to about 88% is expected as part of the further expansion by December 2007, when a SAG mill will be added to the plant.

At 2500 tonnes per day throughput, with approximately 88 percent copper recovery and a copper concentrate grade of about 26 percent, Punitaqui will be a low cost operation which will have a marked impact on the company's profitability," said Callaghan.

While the favourable turn of the commodity cycle has helped SMC, the Australia-based junior is also benefiting from the expertise of a fresh management team that is determined to increase production threefold from current levels by early 2008, and rein in costs by internally funded upgrades to its processing plant at Punitaqui.

The fresh and focused approach by the new management team, and the methodical and strategic manner in which the production at Cinabrio and Punitaqui is being implemented, has seen the company's share price more than double since the end of fiscal 2006.

 

[laurie]

Honeymoon period over management now have to deliver the goods and the market thinks it's still SMO of the old

cheers laurie

 

[prawn_86]

I noticed it been a long time since anyone has even thought about this stock here. Not really so for the market. I have just bought a small stake and will describe my reasons:

It appears to be trending upwards and the new management team seems to be doing very well for itself. The directors have bout over $1.2 million worth of stock within the last 3 months, with some of them buying in at 24c when the year high is just 26c. this suggests to me they know something we do not, or they are very confident with their ability. The IBR merger has gone unconditional and should hopefully be complete next week. Even if it doesnt reach the magic 90%, TMR has said they will run it as one company. Perhaps the biggest upside for this is the fact that TMR already have a cashflow due to their chilean mine and as far as i understand their copper is unhedged, which in the short term may be volatile, it should lend towards greater earning overall (hopefully). A cash flow in a small cap like this is a great oipportunity for them to continue exploration. Managements vision is to be a mid-teir miner within 3-5 years.

Whats the other sentiment out there?

 

[robandcoll]

Notes from the AGM on Friday: These are not my notes but from someone who attended:

TMR - May 2007 AGM – Notes by shareholder who attended.

HC Presentation – Please read on line. It was distributed as an ASX document.

MF Presentation - Please read on line. It was distributed as an ASX document.

Other bits and Q&A – not really included in presentations

Secondary Listing is being considered. Think London, Toronto or New York. The fund managers LIKED the story. HC said “Expect significant re-rating”.

Executive Team is moving to London in the next 6-12 months. (To low cost suburb).

A question was raised about why Peter Evans was still on the board. Answer: He is resigning in about a month.

Charters Towers – Mill is going to Armenia. The Richton leases will probably be sold, but with a royalty clause.

HC sees to merged entity becoming a global mid-tier metals company. HC’s definition of this is $US 500 Million. The merged entity would have a capex of $ 250 Million.

HC has been quoted as saying he believes the company will be worth 1 Billion by end of 2010.

The 1st Qtr of this year yielded $5.5Million, based on 1,250 tpd throughput and an average POC of US$3.01.
The current throughput is 1,500 tpd. By end of year it will be 3,000tpd.

This means 1 Qtr of 2008 will yield 2.4 times the $5.5Million EBIT, based on the same POC.

By January 2008 TMR will produce 26-28 Million lb of Cu annually.

But if the same POC is used the 2008 1st Qtr EBIT will be greater than 2.4, because the cost per pound of copper is going down with higher throughput. Let’s say 2.6. This means $14.3 Million EBIT.

On a yearly base this would mean $57 Million for year 2008.

Folks! This is from Cenabrio only.

Add to this the other assets of the combined entity and you are looking at some very nice numbers.

The March quarter saw an improvement from 19% to 25% in concentrate grade.

The June quarter will see an improvement from 70-72% to 78% recoveries. The reason for this is that as they dig deeper and go through the initial Oxide layer they reach the ore body.


Merger Talks

The offer will not be changed.
Current uptake is approx 75%.

Two institutional investors are accepting, but cannot until the last day of the offer. This is due to their charter. These two would add another 11%, taking us to 86%, which is only 4% short of the magic 90%.

However, should the 90% not be achieved, TMR will still go ahead as if there was one physical company.

There would be some additional admin to manage the two entities and to ensure the minority holders are being looked after. HC said one very interesting thing on this topic. Suppose there are minority holders still out there when the company decides to invest in a project – what then? Well, the minority interest would be asked to cough up their part of the money required.

This alone is enough reason to stop fighting the merger. Not to mention the illiquidity, this would occur.

HC - “Iberian is clearly NOT in production”.

Armenia
Lichkvaz - Extensive mineralisation.
Extensive drilling to be done Qtr 3 -4 /2007.
Resource target is +4 Million Oz of Au
Potential of > 100,000 Oz of Au pa
Current structure is that the ore body consists of ‘lenses’ of high grades. The new
thinking is to include the lower grades surrounding the lenses. This would lead to a
resource upgrade.
Portugal
Montemor - Resource close to surface
50,000 meters of RC and diamond core completed.
Moving to full feasibility.
Objective is to prove +2 Million Oz of Au
Looking at production of 70-80,000 Oz pa from 2008-09.

Tungsten - No real update

End of Report
++++++++++++++++++++++++++++++++++

 

[prawn_86]

so whats the general opinion out there now that TMR didnt achieve the 90% of IBR they wanted.
HC says he will continue on as though they are one company, and personally i cant see the advantages that the remaining IBR shareholders have by retaining their stock, as they are still liable for 14% of the costs. Hopefully one of the instos sees this and seels which will take it over 90%.
imo this is still quite undervalued as they are actually producing both gold and copper and running at a profti, which is always good for such a small cap stock.
hopefully over the next 6 - 12 months the market wakes up and starts to re-rerate them.

 

[robandcoll]

I am expecting the SP to retrace the odd cent or 2 next week as some IBR holders would be dissapointed that they have gone over to TMR and the 90% was not achieved. Resistance at 20c. Never under estimate HC. He will get get things going. Market will react then. Unsure if the 2 big holders are Institutions or Russian holders. Take them out and only leaves 2.43% of holder that did not go over. Will be interesting. I hold and very confident of a long term play.

 

[robandcoll]

Excellent Read:

Jolting life into Punitaqui

MEET the copper miner that is establishing itself as a mid-tier miner in a forgotten corner of copper-rich Chile. Report by Paul Garvey.

When Tamaya Resources managing director Michael Fischer says his management team was starting from a comparatively low base when they took control of the Punitaqui copper mining complex late last year, it is important to note exactly how low that base was.

Fischer widely uses the analogy that Punitaqui has just been through major surgery. Right now, the project – which has been on the receiving end of 10 intense months of overhauls, upgrades and improvements – is in the early stages of its rehabilitation.

By the end of the year, when its 3000 tonne per day production capacity target is reached, Punitaqui will be fitter and healthier than ever before.

But Punitaqui's improving health is a stark contrast to the state in which the project found itself in mid-2006. If it is recovering from major surgery now, then it was on life support then.

Hanging on a wall in the office at Punitaqui is an old, undated, sepia-tone photograph of the plant dating back to the early days of the operation, which first came into production in the 1930s.

According to the company's current management, the plant was little changed when they took charge in the second half of 2006.

Looking at the overhauled plant that exists at the project at present, there are still components – albeit now decommissioned – visible in the old photograph.

In that intervening time frame since new management took charge at Punitaqui, much of the old plant, which was capable of processing just 800t of ore a year, has been removed or decommissioned. Along the way, the plant's capacity has improved from 800tpd to 1400tpd.

At the time of MiningNews.net's visit in early April, Tamaya was in the final stages of commissioning a brand-new 3800tpd three-stage crusher that will replace the outdated unit currently in place.

The new crushing unit, installed at a cost of $US2 million ($A2.4 million), is capable of crushing up to 4000t of ore a day – well above the current daily plant throughput capacity.

Should everything go to plan, that extra crushing capacity will be put to use before the year is out as the throughput capacity cranks up to 3000tpd.

Recent news that Tamaya has begun studying the potential of the oxide resources at Punitaqui's associated Cinabrio mine suggests Tamaya may eventually use that spare crushing capacity to support a solvent extraction and electrowinning component.

The new crusher is but one of the improvements being installed at Punitaqui.

Two new Larox concentrate presses will be installed alongside the unit already in place, while preparations are being made to add another thickener.

On top of that, two new floatation cells will be added before the year is out.

The two flotation cells, together with the one already being used, were all purchased from BHP Billiton's Escondida mine (indeed, the concentrate that was left in the bottom of the cells helped the mine's cash flow while the unit was being installed).

In addition, one of Tamaya's Chilean managers is currently in Europe overseeing the relocation of three second-hand ball mills out of Spain.

But the turnaround at Punitaqui goes far beyond the easily visible improvements at the plant.

Beyond the new equipment, arguably the biggest improvement has been in the management team assembled over the past year.

The management changes at Tamaya began in June 2006 when the company – then under its former moniker of SMC Gold – recruited Hugh Callaghan to the chairman's role.

Callaghan himself came to the company after a lengthy career within Xstrata and Rio Tinto. Prior to joining Tamaya, he was also responsible for taking Riversdale Mining from a cash shell into a profitable coal miner worth well in excess of $A100 million.

Since then, Callaghan has recruited a team of executives and managers who have spent the bulk of their long careers working together.

The first recruit was Fischer, a veteran mine manger who had spent time at the Tolukuma gold mine in Papua New Guinea and CBH Resources' Endeavour lead-zinc-silver mine in New South Wales.

Drawing on his experiences, Fischer helped recruit former Tolukuma colleagues Steve Playford and Peter Gilligan out to Punitaqui. Today, Playford serves as Tamaya's general manager – Chile, while Gilligan oversees the mining operations.

Nick Lindsay, who since December last year has held the post of Tamaya's director – exploration and business development, was a classmate of Fischer's at university more than 20 years ago, and worked with Fischer at CBH. Along the way, he spent almost a decade in Chile as Anglo American's South American exploration and business development executive.

More recently, Tamaya has engaged the consulting services of geologist ex-Pasminco chief geologist Colin Lutherborrow. He also has a CBH connection, having worked as an independent consultant for the miner.

The crux is that despite having only been together less than six months, the senior management is acutely aware of the strengths and weaknesses each member brings to operation.

Playford in particular has been a boon for the fortunes of Punitaqui. Fluent in Spanish, he is permanently stationed in Chile and does not see himself leaving South America.

For that reason, his future is tied to the success of the mine in more ways than many of his expat mine manager peers elsewhere in the world.

According to Playford, the new management at Punitaqui has introduced a focus on basic systems, protocols and safety policies that had previously been lacking.

As an example, he says, the Punitaqui complex now ranks as one of only two mines in the region where miners are equipped with self-respirators.

On top of that, the mine has had two firsts that are extraordinary only because the mine operated for so long without them.

Punitaqui now has a mining plan for the first time in its history. And in early April, Tamaya handed down the first reserve statement in the mine's history.

That reserve of 4.3 million tonnes grading 1.1% copper gives Tamaya the confidence to pursue the Cinabrio ore body, and the geologists onsite are firm in the belief that further tonnes will be added at depth.

The reserve covers only the top 100m of the ore body but limited deeper drilling has identified what appears to be ore body around 200m beneath the reserve's deepest cut-off point.

Promisingly, the ore body appears to be getting richer with depth. Limited drilling targeting depth extensions at Cinabrio have returned grades in excess of 3% copper.

The reserves, coupled with exploration success at depth, suggest Tamaya will have little problem sourcing the feed for the expanded plant down the road at Punitaqui.

Part 2 continues in the next post

 

[robandcoll]

The rest of it:


According to Gilligan, the main impediment to upping the mine's output will be ventilation.

Ventilation had long been neglected within Cinabrio, with the result being a wait of at least two hours after blasting before operations can resume.

Work on a life-of-mine return airway system began recently.

Alternatively, there's an outside chance Tamaya may make the belated move of mining Cinabrio as an open pit. The ore body itself sits within a small hill, and the base of the reserve is well above the valley floor at the foot of the hill.

Since Gilligan began at the mine at the start of the year, Tamaya has reported an improvement in both operations and conditions underground.

His task has been aided by the delivery of a new Tamrock twin boom Axera jumbo and the refurbishment of an existing jumbo.

Tamaya expects the two jumbos to reach and open up the 3000tpd rate by the end of the year.

While the mine adjusts to meet the newfound capacity in the plant, Tamaya is churning through the more than 60,000t of stockpiled ore that was previously too large to process through the original plant.

As part of the upgrades, even the road linking the Punitaqui plant with Cinabrio will receive attention.

With 1400t of ore being moved each day, an average 150 trucks pass along the road between the mine and the plant – directly through the centre of the small town of Punitaqui.

In a move motivated as much by safety as efficiency, Tamaya will spend $US200,000-300,000 building a haul road around the town in readiness for the doubling of traffic that will come with the move to 3000tpd.

So what has Tamaya got to show for all these initiatives?

During the March quarter, the Punitaqui complex yielded its fifth consecutive quarter of increased copper output.

The rise to 1245t copper-in-concentrate for the March quarter represented a 20.1% improvement over the previous quarter.

Gilligan's immediate impact on the mine's output was reflected in a 9.5% gain in ore mined.

C1 cash costs, considered by many a key indicator of a mine's efficiency, fell 22.1% on the previous quarter's result to $US1.52 per pound.

In the context of a copper price hovering between $US3.00 and $US3.50/lb, those cash costs can generate some decent margins.

However, Fischer and his team can see continued room for improvement on that front.

First and foremost, the repeal of the treatment and refining charges inherited from the previous management should become visible in the bottom line from the June quarter onwards.

While Tamaya has not specified the amounts likely to be saved from the new TC/RC regime, do not be surprised to see savings in the realm of 30c/lb copper.

Additionally, the recent commissioning of a rougher re-grind mill at the end of April is expected to transpire into improved recoveries, while tonnages through the mill will be boosted by two months worth of ore from the newly installed crusher.

By the time the year is out and the expansion to 3000tpd is complete, Fischer expects cash costs to fall to as low as $US1/lb.

In moving the operation from 800tpd to 1400tpd, Tamaya turned Punitaqui from a decrepit drain on cash flow into a handy earner.

At 3000tpd, Tamaya will be producing at an annualised rate of 12,000-15,000tpa of copper-in-concentrate. Should copper hold above $US7000 per tonne, Punitaqui could be generating more than $US100 million a year in revenue.

But that is by no means the end target for Tamaya.

In part two of MiningNews.net's in-depth look at Tamaya's Chilean asset base, we will look at the strategies that Tamaya hopes will ensure it has a foothold in Chile for a long time to come.

 

[vvguru]

good read, thanks a lot robandcoll. i hold quite a bit of TMR now largely
in red, but this gives me the boost of confidence.

cheers.

 

[robandcoll]

No problems. Got in very early when Hugh took over. Again have a large holding. It is one of those that you can rely as it is a producer and what will it be in 2009. Looking forward to Pt2 of the story though

 

[prawn_86]

the latest BRW issue has a full page write up on Tamaya and HC! Saying how the new management team has achieved all its original goals and now hopes to be worth $1bill in 2010

check it out

 

[robandcoll]

Up 10% today, with increase in volume. Buy side is heavy compared to sell side.

Another read:

Tamaya takes punt on Chile's coastal rangesFriday, 15 June 2007

COPPER miner Tamaya Resources may have established its credentials as a serious corporate manoeuvrer through its tilt at Iberian Resources, but on the ground in Chile the company is working on an ambitious growth strategy on several fronts. Report by Paul Garvey.

Those who have been keeping an eye on Tamaya in recent times will know about its takeover bid for advanced gold play Iberian, with that union expected to create a diversified copper-gold producer with projects in four continents and a market capitalisation in excess of $A200 million.

But what many may be unaware of is the multi-pronged approach to building a greater presence in and around its current position in Chile's coastal ranges.

For those unfamiliar with the basic geography of Chile, the nation comprises a narrow north-south strip of land hugging the southwest coastline of South America.

Running directly through the nation are two mountain ranges, the world-famous Andes and the lesser-known Coastal Range.

It is the Andes that are home to the massive, low-grade copper porphyry systems such as Escondida and Chiquicamata that have helped underpin the nation's economy and which have made Chile the world's largest copper producer.

Those world-famous deposits have also made the Andes a popular destination for miners and explorers on the hunt for the Big One.

The Coastal Ranges, however, are not as prominent as the Andes, both in terms of their physical height and their presence on the radar of international miners.

While the copper deposits of the Coastal Ranges are small and high grade in comparison to the large, low-grade mines of the Andes, the Coastal Ranges represent a major global copper production centre. It is one of the world's great iron oxide-copper-gold provinces, having thrown up world-class deposits such as Freeport's Candelaria.

According to Tamaya's Nick Lindsay, the narrow strip of land that is the Coastal Range yields around 500,000 tonnes of copper metal a year – in comparison, the entire continent of mineral-rich Australia produced just over 900,000t of copper in 2006.

It is in these ranges that Tamaya's short-term growth ambitions rest.

The potential of this area is obvious when driving north from the Chilean capital of Santiago to Tamaya's Punitaqui production centre, near the town of Ovalle.

The hills that line the sealed highway along the route are bare except for the cactus, goats and mine adits that dot them.

The adits, which can be seen almost continuously along the route from Santiago to Punitaqui, are the work of local "pirquineros", the artisinal miners who make a living hand-picking copper mineralisation out of the ground and selling the ore direct to state-owned copper smelters.

Despite the back-breaking nature of the pirquineros' work, artisinal mining is a key employer in the poorer regions outside of Chile's cities.

Under contracts with state-owned refiner ENAMI, pirquineros can mine 2000t of copper ore per month, then on-sell it direct to refineries in what is as close to a welfare system Chile has to offer for impoverished northern communities.

At the time of MiningNews.net's visit to Ovalle last month, dozens of ore-laden trucks were snaking for kilometres in a slow-moving queue towards the gate of the local smelter, ENAMI's Panucillo facility. According to Tamaya's Steve Playford, the queue seldom shrinks.

Tamaya is currently focused on improving the output of its Cinabrio mine and Punitaqui processing plant (see separate story here).

The company has also flagged the potential of yielding another 2000-3000t of copper each year through the addition of a solvent extraction and electrowinning circuit to Punitaqui.

In addition, Tamaya's first attempts at drilling long-forgotten prospects in and around Punitaqui have met with early success.

One of these key prospects is San Andres, a hill literally a stone's throw from the Cinabrio mine that Tamaya hopes could host a repetition of the Cinabrio system.

Initial drill core appears promising, but assay results are unlikely to be known until the release of the company's June quarterly report.
The miner recently announced it had advanced up the exploration food chain with the Cerrillo Tamaya project.

Cerrillo Tamaya, which sits to the northwest of Punitaqui and from which the company took its name, was for 100 years one of the world's largest copper mines.

Cerrillo Tamaya was mined on a commercial scale between 1575 and the early 1930s, and was an incredibly high-grade system – indeed, much of its early production came at the stunning grade of 25% copper.

Today, the mine is still being worked by a dedicated band of pirquineros under an arrangement with Tamaya.

While the upper reaches of the deposit would appear to have been thoroughly picked over, in the current copper price environment and given the lack of modern exploration, Tamaya is hopeful of identifying rich extensions beneath the current workings.

Away from its existing suite of assets, Tamaya sees itself becoming a key consolidator of the ground currently held by pirquineros. As Playford notes, many of the pirquineros are getting older, with the younger generation less enthused about following in the footsteps of their forebears.

The nature of the work and the slim margins on the production means that very little capital, if any, finds its way back into the pirquineros' operations.

This makes them alluring drill targets for Tamaya, which – for the right project – has sufficiently deep pockets to make the pirquineros happy sellers.

The company has already signed one such deal.

Shortly after MiningNews.net's visit, Tamaya signed an option to acquire the nearby Satan mining lease from local vendors. Tamaya will pay an initial $US100,000 to spend 12 months evaluating Satan, and can acquire the project outright at any time in that window for $US3 million.

As word of the new regime at Punitaqui has spread into the surrounding area, Playford and his colleagues have been inundated with approaches from pirquineros with projects on offer.

It has been easy for Playford and his team to dismiss much of what has been offered but it is certainly not beyond the realms of imagination that, in such a copper-rich area, one of these projects could throw up an economic system that will justify the construction of a second Tamaya processing plant in Chile. (The existing plant will reach its natural capacity when the upgrade to 3000 tonnes per day is achieved at the end of the year, with existing resources and reserves at Cinabrio sufficient to keep that plant well fed.)

Indeed, Playford says it will only take the delineation or acquisition of a deposit around 20 million tonnes to justify the construction of a new 3Mtpa plant. Such a facility would be triple the size of the facility at Punitaqui once it reaches its upgraded capacity.

As an example of its outward reach, Playford has signed on as a consultant an ex-senior manager of ENAMI to scout Chile and neighbouring nations for more potentially company-making assets. Tamaya also uses its own contacts built up over the years of experience in Chile to search further afield in the IOCG belt.

Regardless of how that search pans out, Tamaya stands to reap big rewards through the successful identification of smaller deposits. It is in a privileged position as the only international company mining and processing copper in what is a richly mineralised belt.

 

[robandcoll]

And another story: Juicy bit highlighted.

Tamaya ready to step up to the mid-tier (Weekend Australian)

June 15, 2007

IT'S been two weeks now since Tamaya Resource's friendly scrip bid for Iberian fell agonisingly short.
Much has happened in those 14 days. The boards of both companies have been re-jigged and it is believed that Tamaya is pushing ahead with plans to delist Iberian from the Australian Securities Exchange.

And since the close of the offer on May 31, a paltry 57,000 shares have changed hands in Iberian as the liquidity dries up.

But a funny thing happened on the way to the ASX today.

The value of Tamayan scrip actually closed above the nominal offer value for Iberian for the second day running as the stock market finally gets some traction over the potential of the company.

Remember Tamaya was offering four of its scrip for every one Iberian share.

Tamaya shares today gained 2.5 cents, or 10 per cent, to 27.5 cents on significantly higher volumes. Iberian closed unchanged at 90 cents.

Based on the now closed offer, Iberian should be worth $1.10.

But no-one seems to want Iberian shares. That puts the 14 per cent or so which held out against the offer in a difficult position.

Did they miss the boat? Did they make the wrong decision? Do they know something that the Tamayan holders don't?

Those are some pretty significant questions which only the Iberian folk know the answer to.

One thing is for sure, Tamaya boss Hugh Callaghan is knocking on plenty of doors around the country letting everyone know his plans to take Tamaya into the mid-tier category.

With cashflows from its Chilean copper assets, and now the controlling stake in Iberian's Armenian gold project Lichkvaz, things are starting to get interesting for Tamaya.

And it looks like Callaghan has received a co-operative ear from Shaw Stockbroking.

One week after the unsuccessful Iberian bid closed, Shaw put out a note on Tamaya labelling the stock a buy.

"Through Iberian, Tamaya hopes to be producing gold at a rate of 100,000 ounces per annum at the Lichkvaz project within the next two years," Shaw reported.

Copper production at Chile should also increase to 14,000 tonnes a year.

Shaw also commented that Tamaya had "high probability" for resource and mine life extensions.

It put an upside valuation of the stock at 62 cents, more than double the price it closed at on Friday.
One way or another, the dissident Iberian shareholders bet either Callaghan didn't have the scope to take Tamaya to the next level, or they felt Iberian scrip was worth more than what he had offered.
Unfortunately for them it looks like they are out of the money at the

 

[Lachlan6]

I was considering entering (TMR) on Friday but went for PRU instead. Dont get me wrong, (TMR), still looks technically strong IMO, however a few factors made me decide on PRU. Firstly it may be difficult to place a stop on TMR due to the declines well back into previous ranges seen in March and May of over 61.8%. Sure the March decline was on small volume, however I prefer buying into ascending triangle patterns with tighter ranges.

Furthermore the weakish close on Friday showed that buyers are not yet going crazy for TMR and may be a precursor to a decline back to support. Still though, those long I think are on a good one ready to eventually go much higher.

 

[prawn_86]

Lachlan,
IMO this is much more of an investment stock, than one to be traded. The market will slowly wake up to the potential of both the resources and management of the company and will see a constant rerating over the next couple years.
One to put in the bottom drawer then look at again this time next year. I havent even really bothered looking at a stop for this one, but as I said im not trading it.

 

[nizar]

This one is textbook.
Breakout through resistance into all time highs/blue skies on volume

If you find a better chart please let me know.

In my opinion TMR is better than PRU due to several reasons.
Firstly because the resistance that was broken was tested more times (2x versus once) and its more historical.

Better volume confirmation as well. 7.5x 3-month average for TMR versus 2.5x for PRU.