Ann: Strong Tin Intercepts Continue at Tallebung, page-2

Oliver Davies Q& A with Market Open's Rueben Hale

Sky’s the limit for tin: the forgotten metal

November 3, 2023 By RUEBEN HALE

Tin was once used in earnest throughout history butis rarely at the forefront of most people’s minds today. Sky Metals CEOOliver Davies says tin is one of the most essential and valuable critical metals – the glue ofglobal electrification.

Sky Metals willsoon release its mineral resource estimate for the Tallebung tin project inNSW. The company is confident that these numbers will support the developmentof Tallebung as a significant tin producer globally. With TOMRA ore sortingtechnology and the project’s location near Asian hungry Asian export markets,Davies sees an opportunity to boost Australian tin production.

“Tin was once widely used in artisanal projects but was replaced byhighly toxic lead,” Davies says. “Its use has remained consistent, butelectrification has put future supplies at risk.”

Speaking with Market Open, Davies highlightsTallebung’s profitability potential due to its strategic location near Asianexport markets, rising tin prices, and technological efficiencies, making it anattractive investment with a low start-up cost and high cash flow opportunity.

How can people afford to use tin on roofs if it isworth so much?

There is a common misconception about tin’s value,partly due to a lack of understanding. Tin is frequently referred to as“tinny,” which is likely the cause of this misconception. Tin is a valuablemetal – if your house had a tin roof, it would be worth three times more thanif made from copper. Therefore, there is a need to bridge the gap in knowledgeabout tin’s actual value.
How did it become the forgotten metal?

In the 80s, the price of tin crashed, which led toa decrease in strategic stockpiles in the US during the 90s and early 2000s.Tin demand mainly came from artisanal projects in developing countries untilthe noughties when it was widely understood that lead was toxic, and the EUmoved to ban lead use in solder, only leaving high-value tin as a viablealternative. It is a metal that has been taken for granted for a long time butnow requires attention.

To what extent have economics and technologicaladvancements contributed to the viability of Tallebung?

When Sky Metals first looked at the project in2019, they found narrow high-grade veins with a lot of plain rock in between.Initially, they thought the veins were too sporadic for mining, but bulk tonnage approaches madepossible by TOMRA have drastically changed that assessment. Ironically, oresorting technology has been around for over a century – the only realdifference now is that computers and X-rays can sort millions of tonnes in ayear.

TOMRA has successfully achieved minimal waste atTallebung. How was this achieved?

Tallebung’s rocks make it ideal for sorting. With adensity difference of three times between the host rock and cassiterite, theX-ray measures the contrast in densities. The TOMRA ore sorting can separatethem, upgrading the product’s value while reducing the environmental footprintby significantly reducing the water and electricity needed for processing.

How much interest are you receiving from potentialofftake partners?

We have received keen interest from severalparties, including car manufacturers, who are seeking a reliable source of tin.The growing demand from global electrification has added to the pressure on thefragile tin market, and these automakers are aware of the challenges they facein securing a steady supply of this metal.

You recently reported an extension of themineralised zone at Tallebung. Did the news exceed your expectations?

We realised we’re yet to reach the edges of amassive system. The real surprise was that the grade remained consistent as itextended outwards. We’re still getting broad zones of 0.2% tin, and that holewas stepping about 100 meters further south than any of the historic workings,showing us that the tin mineralisation is more widespread than the old timersfound. Previously, we limited our expectations on the deposit size based on howmuch was discovered historically. Discovering how much more significant it isthan we initially thought is encouraging.

Are you now increasing your exploration targetbased on the observations made?

Yes, that will come with our updated resource inthe next month or two. It started as a pretty ambitious target, and now we arehappy to have the opportunity to build on that as we do more drillingsignificantly.

How close are you to reaching the critical massneeded for mining?

We must constrain our expenditure to establish acritical mass for future mining. This is important because we want to avoidunnecessarily expanding our resources. By doing so, we can conduct scopingstudies, close the gap with the market and show how we see SKY becoming one ofthe world’s lowest-cost tin producers.

What is the magic number you are hoping for?

Our target is around 20 million tonnes, which seemsreasonable since we have already achieved half of that goal. Initially, we hadset an Exploration Target range of 16 to 21 million tonnes, but we hope toexpand this with the next round of drilling significantly. As we continue toexplore, we plan to increase our target.

Do you feel more confident now than when you firststarted?

Our confidence level is naturally growing as werecently drilled a hole out the back on the western margin of the deposit.Initially, it was meant to be a proof-of-concept hole to show that there wouldbe no tin out there. However, we drilled it to 162 meters from the intended 100meters because we were hitting good tin veins. We have not missed our targetyet, so we feel good about our prospects!

Are you confident enough to have already startedyour scoping study?

It’s a bit of a chicken and egg situation because,on the one hand, we never want to drill out a deposit that we don’t think willbe economically viable. On the other hand, we must drill out the deposit to acertain extent to release our scoping studies. We have completed those studiesin-house based on our confidence in the resource, but we must get moreconfirmation before publicly announcing what we’ve found.

What export markets are you targeting for the tinofftake from Tallebung?

We now have much interest from Malaysian, Korean,and Japanese smelters. The demand for tin is high, particularly in Asia, asplaces like Malaysia have seen decreases in their mining in recent years. So,finding a destination for our tin doesn’t seem particularly difficult.

SKY METALS’ TALLEBUNG TIN DEPOSIT CONTAINS 18KT OF TIN WITH A GRADE OF0.18% FROM 10.2 MT. TIN IS IN HIGH DEMAND FROM MALAYSIAN, KOREAN, AND JAPANESESMELTERS AND SELLS FOR THREE TIMES THE PRICE OF COPPER.