The company said it would withdraw from the Landazuri project in Colombia, to focus efforts on the large, high quality Amaam North tenement in Chukotka.
In January 2012, Tigers announced the acquisition of the Amaam North tenement which significantly increased the scale of its activities and potential resource endowment in Chukotka.
It said data from an open-hole drilling program undertaken at Landazuri during the first quarter of 2012 indicated the coal measures were more structurally complex than earlier geological interpretations indicated.
While tonnages of coking coal with the potential for open pit mining were likely to be at the lower end of the company’s expectations with strip ratios higher than originally anticipated, Tigers decided the farm-in terms for the Landazuri option agreements were no longer commercially attractive.
“Following a number of unsuccessful attempts to renegotiate the terms of the agreement, TIG has made the decision to withdraw from the option agreements relating to the Landazuri tenements in order to focus on its large-scale Russian coking coal project,” Tigers said in a statement released to the Australian Securities Exchange.
“This is consistent with Tigers Realm Coal’s strategy of building a leading global coking coal company.
“TIG has a clear duty to its shareholders to allocate capital in a manner which will maximise value.
“As a result of the factors outlined above, the company must ensure that the majority of its capital is allocated to the Russian project.”
The company said it would have significant cash savings from the relinquishment of the Landazuri tenements, while the move would also reduce its near-term capital requirements and exploration expenditure.
“With the increasing focus on far eastern Russia, TIG initiated a strategic review of its project portfolio to ensure that resources are allocated in a manner which will maximise shareholder value,” the company added.
“TIG’s vision is to build a leading coking coal company.
“Based on the scale and quality of its Russian assets, the company is confident it can achieve this vision with the Amaam coking coal project alone.
“Progress at Amaam has been excellent, with recent drilling increasing inferred resources to 406 million tonnes coking coal with an additional exploration target of 180-280Mt.
“The bulk of the 2011-12 drilling program was targeted at increasing the confidence levels of a significant proportion of the existing resources to indicated and measured categories.”
Final results from drilling are expected to be released in the third quarter of 2012 and a prefeasibility study is on schedule for completion by December.
Tiger said the PFS was expected to confirm the project’s large-scale production potential and robust economics.
The results of coal quality testwork and a logistics study will also be released to market progressively during the second half of 2012.