The group’s projects are located in the Democratic Republic of Congo. TGS also has a majority interest in gold exploration in the state of Amazonas in Brazil.
The company is in early stages of exploration at most of these projects, though TGS is on schedule for the start of copper production from its Kipoi project in 1Q11.
The outlook for copper is positive on a recovering global economy and demand from China.
Copper + China = Success
Though TGS explores for a number of minerals, its major interest is copper.
Last week copper prices weakened amid tensions on the Korea Peninsula and concerns over China’s monetary policy tightening measures.
The short, medium and long term outlook for copper demand from Asia is positive. China in particular is showing increased demand for metals, especially copper, of which Australia boasts bountiful resources.
Chinese copper demand is slated to continue as the region’s economy continues to grow. China’s economy expanded 9.6% in the third quarter alone.
Lucrative project placement
TGS’s operations include the Kipoi project in the central part of the Katangan Copperbelt.
The project hosts five known copper deposits, Kipoi Central, Kipoi North, Kileba, Judeira and Kaminafitwe.
TGS’s 100%-owned Sase project (part of the Lupoto permit) is just 10kms south of the Kipoi Project and the Sase Copper Project can be accessed by a road that leads directly to Kipoi.
There is potential for the high grade mineralisation to extend the life of the Stage 1 development at Kipoi Central.
Another project, Sakania, which is close to the Zambian border, occupies an area with known gold and copper occurrences.
On 25 November, TGS released significant copper results from recent soil sampling programmes. Two extensive geochemical anomalies were identified, and results indicate copper mineralisation is widespread within Lupoto.
As such, TGS has outlined new drill targets within Lupoto. The group has the cash to continue drilling, confirming cash on hand at the end of the September quarter of $26.1 million.
As an explorer, TGS has yet to release any meaningful financial results. However, the company is looking highly prospective owing to its exposure to copper, which is seeing increasing demand from China.
Going ahead, TGS is on schedule for the start of copper production from Kipoi in 1Q11, and given the positive outlook for copper, it will be one of the stocks to watch in coming months.