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FROM THE BROKING DESK

Kasbah Resources (ASX:KAS) (A¢1.4)

Positive DFS on 75%-owned Achmmach Tin Project

We have been watching progress at the ASX-listed Kasbah Resources with some interest. The company has announced positive results from a DFS on its 75%-owned Achmmach Tin Project in Morocco and its Board and partners are set to proceed with securing funding for the its development.

To produce 4,500tpa at attractive AISC of US$11,435/t of tin

The project is based on a reserve containing 58,000t of tin. An underground mining operation is planned, together with a gravity and flotation-based processing plant incorporating ore sorting and high-pressure grinding rolls, with production of 4,500tpa of tin in concentrate. The project’s initial capex was estimated at US$96m (including first fills and contingency), with AISC at US$11,435/t of tin. Cash costs are attractive; they’re at around the upper end of the first quartile and the lower end of the second quartile of the work tin cost curve. Project returns were healthy, with an NPV8 of US$98m and an IRR 23%, assuming a long-term tin price of US$21,000/t.

Moving forward to secure project finance

With respect to the outlook for the funding of the project’s development, we note that the company’s partners in the project are two Japanese entities (Toyota Tsusho and Nittetsu Mining) that jointly own 25% of the project and are responsible for funding their share of the development. The company currently has a market cap of A$15m and its shareholders include Pala (21%), African Lion (13%), Traxys (4%) and Acorn Capital (3%). 

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