The tin boys are singing that old campfire ditty again, the one that puts tin in the best of company.
"We've shares in the very best companies/In tramways, tobacco and tin/In brothels in Rio 'Janeiro/By god how the money rolls in."
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It was last sung with gusto back in 2008 when tin raced off to a record $US25,500 a tonne in response to supply shortages in the face of booming demand from the metal's three main markets - lead-free solder, steel tin-plating and chemical PVC additives.
But then the global financial crisis came along and spoilt the party. But like a bunch of other metals, tin is back in town.
Overnight, tin climbed 1.6 per cent to $US22,650 on the London Metal Exchange, a two year high and putting it within sight of the all time high.
Macquarie's commodities desk reckons that it is worth noting that tin inventories are now close to the low levels that took the price to the 2008 record levels.
It said that reported stocks have fallen from 8.2 weeks of global consumption in 2009 to 5.6 weeks of consumption in August 2010, to be only one week above the stock level that corresponded with the metal's previous peak.
"Given that the tin market appears to be in deficit today, and we expect the market to remain in deficit through the next year at least, we see at least 18 per cent upside from the current tin price ? to its 2008 peak of $US25,500," Macquarie said.
That's all well and good. The problem is that we are not exactly spoilt for choice in this market when it comes to tin stocks. But there is a new entrant in to the field ? Hamish Halliday's Venture Minerals.
It has been travelling all right too, rising from 25 cents at the end of June to the 47 cents a share it commanded yesterday, giving it a market capitalisation of about $80 million.
Last week Halliday took a bunch of broker types down to north-west Tasmania to kick some rocks at Venture's Mt Lindsay project. It currently ranks as the world's fifth biggest undeveloped tin deposit but an aggressive exploration program (5 rigs) is expected to lead to a substantial resource upgrade sometime soon.
Halliday's pitch to the touring party last week was that while Mt Lindsay's tin is certainly worth singing about, the project is actually a three-for-the-price-of-one deal in that development planning envisages three revenue streams ? tin, tungsten and magnetite.
It is the tin and tungsten (71,000 tonnes of tin and 34,000 tonnes of tungsten on a contained basis) that give the project some grunt.
Scoping studies have pointed to the potential for a $130 million project that would generate (net cash) of more than $530 million over the life of the mine, something that could be extended with more exploration success.
The plan is to have a bankable feasibility study done by the fourth quarter of next year. That could mean first production in 2013.
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The tin boys are singing that old campfire ditty again, the one...
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