Agree, a lot here who post assume that ANW will get a price equal to the LME tin metal price. That is not the case. What ANW will get from the end buyer is:
Equation 1: Free on Board Price (FOB) paid to ANW = LME Tine metal price * % tin in concentrate sold - (treatment and refining charges + shipping costs).
Equation 2: How the above translates to profit for ANW will be FOB price - ANW opex cost at mine.
1. Tin concentrate priceFrom the following link -
https://www.internationaltin.org/sustainable-production/:
"
Once a tin concentrate of the required purity has been obtained (55 to 75% SnO2), it is sent to a smelter who smelts it into crude tin metal by removing the oxygen from the mineral. Many unwanted impurities are removed in the slag during this process, but additional remaining impurities are treated in the refining step (e.g. by heating under particular conditions in a cast iron kettle, or by electrolytic refining) where eventually, the refined tin of desired purity is cast into ingots for sale."
I can't see ANW doing smelting or refining so the price it gets will be a a lower element of the tin price, but suspect the concentrate it sell must be at least 50%- 60% concentrate:
See:
http://www.agiboo.com/commodity-knowledge-center/commodities/tin/There is little information available of smelting and refining costs for tin, but suspect they would be in the range of copper but that is a total guess - about US$500 per tonne of contained metal. To illustrate costs from this post in another thread by me: Post #:
39893164Everything below this is not a comment to you, but felt since I have replied I may as well talk about how I see ANW itself since investing just over a week back.
2. A viable tin mine
Now, in the link below, for prospective tin mines they are estimating cut off grades of 0.3% open cut and 0.7% underground mining for viability. See slide 8 in this link, http://www.kasbahresources.com/site/PDF/1256_0/AfricaDownUnderConferencePresentation - with the viability numbers based on by the looks of it US$16,000 per tonne for tin at the time of the presentation - http://www.infomine.com/investment/metal-prices/tin/5-year/ (note 2204 pounds in a tonne). With tin prices now above US$17,000 per tonne cut off grades will be slightly reduced from those in slide 8 above btw and obviously the higher the price the better of you are.
3. What it means for ANW
1. Granville - good quality resource but need more of it. Certainly has very good grades within it. Hopefully should provide positive cash flow but the question is the extent of cashflow and whether that will delay a CR so that they can raise at a much higher price as Granville starts bringing in some $. Whatever funds are raised from Granville (or any CR) IMO need to be used to get rid of this 'killer' CN in place. Where convertible notes are in place as funding my experience has been they are not good on a SP and always favour the note holder. Hopefully with a few shipments of tin concentrate ANW might be able to refinance that CN for good and that is when SP will certainly look after itself. The resource is nice, with some high grade elements but unfortunately not enough of it but with some exploration well might find more resource. The tin concentrate grade to be produced here is stated to be around 60% in their Ann - Post #: 32665267
2. Taronga Tin project - the future of the company, its flagship project as long term holders here know and new holders like me need to assess. IMO, more exploration still required here over time to ensure sufficient resource above 0.2% - 0.3% Sn is identified, but what lowers the cut off grade here below 0.3% and therefore allows ANW to claim viability is despite an average grade below 0.3% Sn is i.) extent of resource, ii.) the low strip ratio (but that also means if they don't install the right capex you can encounter viability problems very quickly given the grade of the resource hence they need to test test test to ensure what capex they put in place and process flowsheet achieves objectives as stated and in the timeframes stated), iii.) the geological features of the resource that allow the tin to be extracted from the ore a little easier, meaning the resource is not say in a 'rock/orebody' host rock that is more difficult and more costlier to extract the tin from - https://www.mining-technology.com/projects/taronga-tin-project/ and iv.) commencement of the tin resource appears not that deep down hence the favourable strip ratio plus assessibility of the resource from a cost front perspective). How easy the tin is to extract from the orebody is the key to viability here and therefore the idea that a 0.16% -0.19% SN ore body is viable to mine IMO, given the large size of the resource itself, but if they find grades in the proposed open pit section higher than 0.3% then IMO things will look very very bright here.
Obviously pilot testing here will aid that assessment, but grade a key and concern and essentially the risk here. The other key is the potential copper and silver credits to underpin viability, and their recoverability given from what I can see little work has actually gone into assessing their recovery albeit from a process flowsheet perspective they can be recovered provided the process flowsheet is installed correctly using the differences in the specif gravity of each in the Dense Media Separation section of the process flowsheet. In theory that is, but recovering byproducts is achievable and a number of mines do it. Refer there Anns: Post #: 34072902.
I recognise the maiden JORC - back in 2013 - is still what they are working on with some minor modifications over time hence my comment around in due course a bit of further exploration won't go astray here: refer there Post #: 13221251 and Post #: 13910357 and Post #: 29823572
I also recognise historical deep drilling shows very good grades - some well above 1% Sn - at depth but these are deep so you need to start with the viability of an open pit mine here. This statement back in 2012 is a good read - Post #: 11131221
Obviously they are going to need equity for Offtake Agreements to fund this project, but certainly Offtake Agreements when approaching the market for capex funding.
3. Other been Torrington (tin which can be tied up with Taronga above in due course) and Mt Cobalt (cobalt). But these are more in the outyears (unless a re-calibration occurs) especially the latter so it is essentially 1 and 2 above, albeit looking at respective Anns the resource grades look ok, albeit they need to find more resource, before they can even assess feasibility or otherwise of each.
Finally, ANW is high risk high reward play IMO. I have invested only a small amount here, so potential investors need to do own research. Only invest what you are willing to lose IMO IMO IMO and obviously my above research and interpretation of the data can be flawed (as i admit I have a lot to learn here myself).
All IMO
