Tin has been among the best performed of the metals this year thanks to a slump in London Metal Exchange stocks to eight-year lows.
Stocks account for less than four days’ usage, which is a good enough trigger to put some pep into prices for the stuff.
The metal was last quoted at $US20,020 a tonne. That’s well up on last (calendar) year’s average of $US16,070 a tonne and some 27 per cent higher than its starting point for the year of $US14,650 a tonne.
The reasons for tin’s rally, and what it mean for Tassie tin developer Stellar Resources (SRZ), were outlined in this space on August 15. The reasons haven’t changed, although it is worth noting that Stellar has since put on 35 per cent to be last quoted at 4.6c a share.
Tin is found in lead-acid batteries, which are undergoing something of a renaissance thanks to the sealed unit type that is powering China’s love affair with electric bicycles and mopeds, and it is found in lithium-ion batteries, which will be the first technology to electrify the world’s transport industry and play a lead role in grid and non-grid power storage.
Tin is also used in the technologies, including supercapacitors, that are being developed to eventually take over from lithium-ion batteries in a range of grid-sized non-battery storage technologies to make renewables more efficient, as well as clean and alternative fuel technologies.
And pushing things along for tin so far this year are tighter supply factors from Chinese restocking, China’s environmental crackdown, Indonesia’s ban on the export of unprocessed ores, a slowdown in Myanmar production, and the lack of new mine developments.
All very interesting but not amounting to much in this market as the only ASX-listed exposure to tin production has for a long time been the Peter Cook-led Metals X (MLX) from its half share in the historic Renison mine in Tasmania. What’s more, Metals X is far from a pure tin play because of the rise and rise of its gold production interests.
That changed in August when Aus Tin Mining (ANW) began production from its Granville project, 20km north of Zeehan on Tassie’s west coast. Initially at least, Granville is a tailings and stockpiles retreatment operation, with the operation having been in private hands previously.
High-grade intercepts in the existing pit feed into a plan for a stage two operation under Aus Tin’s ownership to become an annual producer of 550 tonnes of tin in concentrates.
Aus Tin is in the process of pulling in $1.6m from a one-for-10 equity issue at 1.1c a share, with the issue half underwritten by its biggest shareholder, DGR Global. The stock last traded at 1.2c a share, giving it a market cap of about $20 million on the expanded capital base.
If Granville was the end of the story for Aus Tin, its market rating would seem about right. But there is a lot more to the company, most notable the Taronga tin project in NSW and a real wildcard, Mt Cobalt in Queensland which, as it name suggests, is prospective for high-grade cobalt, something the world wants as an alternative to the supplies out of the Democratic Republic of the Congo, with questions hanging over the sustainability of those supplies.
Taronga has been around for a while and comes with 57,000 tonnes of contained tin, along with 28,000 tonnes of copper and 4.4 million ounces of silver. Long considered grade-constrained, higher prices for tin and work on enhancing feed grade, tin recovery and byproduct credits means Taronga’s time could have arrived.
Adding to its growing interest to the market, the Taronga tenement package comes with lithium exploration potential.
As mentioned in the Liontown item below, interest in lithium exploration results remains as strong as ever. Same goes for cobalt in the lithium-ion battery thematic, if not more so. Mt Cobalt, 40km west of Gympie, has a recorded production history that includes material grading an amazing 7.5 per cent.
Aus Tin is keen to get going with an exploration program there, with the idea being to use free cash flow from stage one at Granville and proceeds from the equity issue. If it lives up to its promise, Mt Cobalt could vie with the tin in the portfolio for market interest. Then, again, the tin price is itself a wildcard.
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