Proactive Investors
Prospects for tin are bright especially with the onrush of electric vehicles.
Any investor keen to participate in the recent base metal revival could do worse than look at tin, which has been overshadowed recently by rivals zinc and copper.
Certainly, it’s the potential for the soft metal that was one of the reasons Russell Clark took the reins at Kasbah Resources Ltd (ASX:KAS) earlier this year.
WATCH: Kasbah Resources sticking to their knitting as they advance the Achmmach tin project
There are others, but the demand/supply equation makes the outlook for Kasbah’s Achmmach tin mine in Morocco especially attractive, he said.
“Cheap as chips” were his exact words and especially so as a recent rally in the tin price, up 50% in 18 months, has not been matched by the share price of Aussie-listed Kasbah.
All change
A topsy-turvy twelve months for the company may be a reason for this.
Canada-listed Asian Mineral Resources’ proposed takeover collapsed in December when a group of shareholders pointed out a fundamental error in the independent valuation of Kasbah.
In the subsequent period all of the senior management has changed, while there has been a complete boardroom overhaul.
Clark himself joined the rejuvenated company in September, having previously been behind the development of Wolf Minerals’ tungsten (and tin) mine near Plymouth in the UK.
“I like speciality metals,” Clark told Proactive, adding the prospects for tin are bright especially with the onrush of electric vehicles.
Tin is mainly now used as solder and he expects electric vehicles to be a sizeable market both for this and also in the batteries that will provide the power.
In recharging, tin is seen as much faster than graphite while a silicon tin alloy can be used to boost conductivity in semiconductors.
Supply constraints
Supply constraints are an even more bullish feature.
Alluvial tin production from places such as Myanmar is running out, he says, while a lot of established tin mines are getting old with little new exploration over the past ten years.
In China, meanwhile, new environmental controls are hitting output.
“Slightly increased demand and significantly reduced supply means the price of tin is going up.”
Kasbah has been working on Achmmach for nine years, but the first step for Clark is to redraw the numbers following the issues with the last report.
A technical review undertaken by a new consultant, AMC, at Achmmach found nothing untoward and even pointed to ways to improve the project’s economics.
AMC has now moved on to a full revision of the previous definitive feasibility study, something expected to be completed in the first quarter of next year.
If successful, Kasbah will refinance at that point and start work on raising the funds for construction of a mine.
Ten-year life
At present, Achmmach has a JORC reserve of 6.56mln tonnes at a grade of 0.85%.
Of this, 877,000 tonnes are in the proven category for about 9,700t metal at a grade of 1.1%.
That would be enough for a 10-year mine life at a rate of production of 8,000tpa of concentrate (4,000t of metal), which compares with total global production of about 350,000 tonnes.
Kasbah owns 75% of the project with two Japanese companies Toyota Tsusho (20% ) and Nittelsi Mining (5%) owning the remainder.
The company also owns the Bou El Jaj tin prospect 13km to the south, which will potentially provide additional feedstock for the processing plant.
A funding in June raised A$5.2mln and saw Russian billionaire-backed resource investor Pala come on board with a 21.6% stake.
African Lion owns 13.7% with three other investors, including two metal traders, owning between 4.3% and 4.8%.
These deep-pocketed backers are another attraction says Clark, but he also admits to liking the challenge in Morocco.
Morocco appeal
Mining has been a feature of the country for 2,000 years and there is a fluorite mine only 30Km from Achmmach.
The government is also keen to boost income from its resources sector with a target to increase revenues three-fold by 2025.
New mining laws have recently been introduced and the site is fully permitted with environmental approval. Few other tin deposits are in such an advanced state of development.
Add in the rising demand and supply challenges for tin, a new board and management, strong backers and a ‘great country to do business’ and you can see the appeal.
“I was looking for something interesting – Morocco, tin, a rising market and great backers have provided that.”
