Sky’s the limit for tin: the forgotten metalNovember 3, 2023
Tin was once used in earnest throughout history but is rarely at the forefront of most people’s minds today. Sky Metals CEO Oliver Davies says tin is one of the most essential and valuable critical metals – the glue of global electrification.
Sky Metals will soon release its mineral resource estimate for the Tallebung tin project in NSW. The company is confident that these numbers will support the development of Tallebung as a significant tin producer globally. With TOMRA ore sorting technology 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 by highly toxic lead,” Davies says. “Its use has remained consistent, but electrification has put future supplies at risk.”
Speaking with Market Open, Davies highlights Tallebung’s profitability potential due to its strategic location near Asian export markets, rising tin prices, and technological efficiencies, making it an attractive investment with a low start-up cost and high cash flow opportunity.
How can people afford to use tin on roofs if it is worth 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 valuable metal – if your house had a tin roof, it would be worth three times more than if made from copper. Therefore, there is a need to bridge the gap in knowledge about tin’s actual value.
How did it become the forgotten metal?
In the 80s, the price of tin crashed, which led to a decrease in strategic stockpiles in the US during the 90s and early 2000s. Tin demand mainly came from artisanal projects in developing countries until the noughties when it was widely understood that lead was toxic, and the EU moved to ban lead use in solder, only leaving high-value tin as a viable alternative. It is a metal that has been taken for granted for a long time but now requires attention.
To what extent have economics and technological advancements contributed to the viability of Tallebung?
When Sky Metals first looked at the project in 2019, 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 made possible by TOMRA have drastically changed that assessment. Ironically, ore sorting technology has been around for over a century – the only real difference now is that computers and X-rays can sort millions of tonnes in a year.
TOMRA has successfully achieved minimal waste at Tallebung. How was this achieved?
Tallebung’s rocks make it ideal for sorting. With a density difference of three times between the host rock and cassiterite, the X-ray measures the contrast in densities. The TOMRA ore sorting can separate them, upgrading the product’s value while reducing the environmental footprint by significantly reducing the water and electricity needed for processing.
How much interest are you receiving from potential offtake partners?
We have received keen interest from several parties, including car manufacturers, who are seeking a reliable source of tin. The growing demand from global electrification has added to the pressure on the fragile tin market, and these automakers are aware of the challenges they face in securing a steady supply of this metal.
You recently reported an extension of the mineralised zone at Tallebung. Did the news exceed your expectations?
We realised we’re yet to reach the edges of a massive system. The real surprise was that the grade remained consistent as it extended outwards. We’re still getting broad zones of 0.2% tin, and that hole was stepping about 100 meters further south than any of the historic workings, showing us that the tin mineralisation is more widespread than the old timers found. Previously, we limited our expectations on the deposit size based on how much was discovered historically. Discovering how much more significant it is than we initially thought is encouraging.
Are you now increasing your exploration target based on the observations made?
Yes, that will come with our updated resource in the next month or two. It started as a pretty ambitious target, and now we are happy to have the opportunity to build on that as we do more drilling significantly.
How close are you to reaching the critical mass needed for mining?
We must constrain our expenditure to establish a critical mass for future mining. This is important because we want to avoid unnecessarily expanding our resources. By doing so, we can conduct scoping studies, close the gap with the market and show how we see SKY becoming one of the world’s lowest-cost tin producers.
What is the magic number you are hoping for?
Our target is around 20 million tonnes, which seems reasonable since we have already achieved half of that goal. Initially, we had set an Exploration Target range of 16 to 21 million tonnes, but we hope to expand this with the next round of drilling significantly. As we continue to explore, we plan to increase our target.
Do you feel more confident now than when you first started?
Our confidence level is naturally growing as we recently 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 would be no tin out there. However, we drilled it to 162 meters from the intended 100 meters because we were hitting good tin veins. We have not missed our target yet, so we feel good about our prospects!
Are you confident enough to have already started your 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 will be economically viable. On the other hand, we must drill out the deposit to a certain extent to release our scoping studies. We have completed those studies in-house based on our confidence in the resource, but we must get more confirmation before publicly announcing what we’ve found.
What export markets are you targeting for the tin offtake from Tallebung?
We now have much interest from Malaysian, Korean, and Japanese smelters. The demand for tin is high, particularly in Asia, as places 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 OF 0.18% FROM 10.2 MT. TIN IS IN HIGH DEMAND FROM MALAYSIAN, KOREAN, AND JAPANESE SMELTERS AND SELLS FOR THREE TIMES THE PRICE OF COPPER.
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