MINERAL resources at the silver-lead-zinc joint venture of Metal Tiger and KEMCO in Thailand have been upgraded. A new Competent Persons Report (CPR) from SRK Consulting has seen contained metal increase 25% over the 2013 report due primarily to resources being upgraded to the indicated category.

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A silver-lead-zinc ore face at one of the KEMCO projects in Thailand’s Kanchanaburi province.

The KEMCO JV includes the Song Toh and Boh Yai silver-lead-zinc mines. Metal Tiger is preparing for separate admission of KEMCO, its Thai subsidiary, to the AIM market.

The CPR states that the contained metal increase will result in a net 12% increase in modelled revenue and operating income up 9% to US$202.5 million despite silver prices falling to US$20 an ounce from a previously modelled US$30.

Boh Yai contains 2.9 million tonnes in the indicated category @ 3.7% lead, 4.5% zinc and 68.4 g/t silver, and 400,000 inferred tonnes @ 3.5% lead, 4.2% zinc and 107.2 g/t silver. Song Toh contains 1.1 million indicated tonnes @ 5.1% lead, 0.8% zinc and 60.1 g/t silver, and 200,000 inferred tonnes @ 8.1% lead, 0.2% zinc and 76.4 g/t silver.

The mines were put on care and maintenance in 2002, having been in continuous operation since 1978.

The final CPR is intended to be included in the admission document in relation to KEMCO’s flotation, which is expected to occur by the end of the September quarter.

Metal Tiger’s CEO Michael McNeilly said, “SRK has determined that the project not only warrants further technical work to commence an optimised reopening, but holds the potential for significant resource increases and enhancement through exploration and assessment.

“The CPR findings provide a firm base on which to further improve the project as we work through mine permitting and develop our knowledge to a prefeasibility study level.

“Whilst the project NPV has fallen to US$45.9 million, sensitivity analysis shows this is largely due to the increased provision for up-front capital cost and operating costs based on international dollar terms.

“The management can see potential for savings by utilising Thai engineering capability at competitive local rates and will obtain detailed costings. We are further encouraged that sensitivity analysis shows that a modest reduction in operating costs combined with a recovery in metal prices offers strong upsides.”

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