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Red Tiger Mining Inc. (RMN: TSX-V) research and analysis

Contributed by eResearch

Red Tiger is involved in the exploration and development of copper and gold projects at its San Antonio properties in the San Antonio District in the State of Sonora in Mexico. San Antonio is 100%-owned by Red Tiger’s wholly-owned Mexican subsidiary, Minerales Libertad, S.A de C.V.

The Company is focusing on the Luz de Cobre project (copper) at San Antonio, designed to produce 15 million pounds of copper cathodes per year (over six years by an open-pit, heap-leach, electro-winning (EW), solvent extraction (SX) operation) at an estimated average cash cost (before interest, depreciation and taxes) of $1.30 per pound. The initial cash cost of production, however, may be higher.

In Q2/2012 (ended June 30), Red Tiger Mining Inc. experienced the first sale of cathodes produced at the Luz del Cobre copper project in the San Antonia District in the State of Sonora, Mexico. The sale stemmed from the stripping of 16 tonnes of copper on May 19. During the quarter, 589 tonnes of COMEX-grade 1 copper were produced, and were sold at an average price of $3.42 per pound. Ore crushed and stacked on the leach pad totalled 327 tonnes at a grade of 0.77% Cu.

Poduction was halted on July 17 following an unprecedented rain storm. Over four weeks of production was lost before irrigation on the leach pad resumed on August 17. A quick recovery saw 112 tonnes of cathodes stripped in the electrowinning plant between August 17 and August 25.

Red Tiger expects to reach a production level of 600 tonnes per month in October, which would subsequently increase to the designed capacity of about 20 tonnes per day.

As the Luz del Cobre project has not reached “commercial production”, sales proceeds net of costs are being credited to the carrying value of the project, and are not considered revenue from operations at this stage.

Red Tiger could achieve an operating profit in Q4/2012 when it enters commercial production.