In a new investor presentation, Stellar Resources Ltd (ASX:SRZ, OTC:SLROF) outlines its goal to become Australia’s next tin producer against a backdrop of falling global tin supply and anticipated exponential demand.
The presentation provides an investment summary, which highlights:
- 100%-owned Heemskirk Tin Project is the highest-grade undeveloped tin project in Australia and the third highest globally.
- Scoping study (2019) demonstrated attractive and robust economics. New studies are underway based on drilling success incorporated into an updated 2023 mineral resources estimate (MRE).
- Excellent location and infrastructure, granted Mining Licences, 100% renewable energy, access to world markets.
- Well-positioned to capitalise on forecast looming tin supply shortage for years to come.
Heemskirk Tin Project
Stellar’s 100%-owned Heemskirk Tin Project has a mineral resource estimate of 7.48 million tonnes at 1.04% tin, for 77,870 tonnes of contained tin. Of that, 47%, or 36,990 tonnes, is in the indicated category. This is the highest-grade undeveloped tin project in Australia and the third highest globally.
The project is in the mining-friendly jurisdiction of West Tasmania, where underground operating mines operate nearby with significant infrastructure and mining services. It is also just 150 kilometres via sealed roads from the Port of Burnie, providing access to world markets.
Stellar has secure tenure with mining licences granted over the Heemskirk deposits, tailings pipeline, tailings storage and St Dizier satellite project.
The project is being developed with a low environmental footprint, Since 2020, Tasmania has produced 100% of its energy needs from renewable sources. Heemskirk will be an underground mine, with limited surface footprint and environmental impact.
Severn Deposit
Severn is the largest deposit with a strike length of more than 500 metres and is open at depth and along strike. Geophysics and detailed geological modelling are underway to assist in drill targeting to increase Indicated resource tonnes and new discoveries adjacent to the resource.
Infill drilling last year delivered wide high-grade tin zones such as 36.6 metres at 1.07% tin from 471.5 metres, including 12 metres at 2.12% tin from 485 metres.
St Dizier Project
In addition to Heemskirk, the St Dizier Satellite Tin Project has an indicated MRE of 1.2 million tonnes at 0.69% tin.
Scoping study
A 2019 scoping study, which is to be updated with the 2023 MRE outlined:
- ~350,000tpa underground mine, on-site processing plant, tailings storage and surface infrastructure.
- Underground mining of Queen Hill and then Severn deposits for the first 10 years.
- Open pit mining of St Dizier satellite deposit and trucking to Heemskirk processing plant included in year 11.
- Scoping study mine plan contains 58% indicated mineral resource and 42% inferred resource over LOM. First four years are based on mining the 100% indicated resource.
- The high level of inferred mineral resources resulted in the study reported to scoping study rather than PFS level.
- Tin concentrate trucked to Port of Burnie for export to Asian smelters.
- Once the scoping study is updated with the 2023 MRE, Stellar expects a major improvement in economics, improved tin pricing metrics and larger component of resource defined in indicated category.
It also has potential to reduce upfront capital costs by repurposing nearby existing operations.
Further, the company highlighted the “excellent upside potential” to project economics with the current tin spot price of around US$32,091 per tonne and a favourable USD:AUD exchange rate (currently 0.66 cents).
Favourable market conditions
Stellar points out that the global energy transition will drive exponential demand for tin — it is ranked as the No.1 metal best placed to benefit from new technology.
This comes as around 50% of all tin is currently used as solder in electronics. However, a clean, new technology future will be driven by robotics, computing, EV’s, energy storage and renewables that all use more electronics and semiconductors, which all require more tin.
It is estimated that tin demand from the green sector could more than double by 2030, topping 70,000/tonnes per annum — equivalent to a fifth of current consumption.
Additionally, tin is expected to be in deficit for years to come.
Deficits in 2020 and 2021 resulted in the tin price pushing over US$50,000 per tonne in early 2022. This increase was the result of two years of deficit, while current forecasts predict more than four years of deficits to come.
Adding to the positive outlook for Stellar is that a majority of global tin production is from unreliable jurisdictions, accounting for 70% of global tin supply.
For instance, Myanmar suspended all tin mining last year; Indonesia banned all unrefined tin exports, while tin production is falling in existing mines due to diminishing reserves and lower grades.
Given the minimal investment in tin exploration, limited viable projects remain to fill the forecast tin deficit.
Stellar Resources asserts that it is “well positioned to capitalise on the forecast looming tin supply shortage for years to come.”