Elementos Ltd’s (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) strategy to become a significant tin producer is gathering strong momentum as it pushes ahead with development strategies at both its wholly owned projects at a time when the LME tin metal price is near ten-year highs.
Tin metal supply disruptions and strong demand driven by global economic stimulus have pushed the LME tin prices to ten-year highs trading over US$28,000 per tonne compared to US$13,450 per tonne a year ago.
Chairman Andy Greig said the strong tin price was driving a substantial increase in the value of both the Oropesa and Cleveland tin projects.
“Exciting time”
He said: “In 2020, we completed an economic study on the Oropesa Tin Project which derived a pre-tax NPV of US$94 million based on a tin price of US$19,750 per tonne.
“Today that pre-tax NPV has increased to US$228 million based on a tin price of US$26,500.
“The current drilling program which has reached the halfway point, is meeting the objective of converting near-surface inferred resources to indicated mineral resources and further enhancing the project value beyond just the increase in the tin price.
“This is an extremely exciting time to be involved in one of few, globally significant, open-cut mineable tin deposits in the world.”
Oropesa permitting continues
Elementos is progressing its Oropesa permitting program including the updated Environmental Impact Application (EIA).
Several supplemental environmental studies are being completed by top tier environmental consultants ERM.
Cleveland Project, Tasmania
Rising tin prices have prompted the company to fast track its work programs at the wholly-owned Cleveland Tin Project in Tasmania.
A recent regional geological and field program has identified new tin mineralisation. A drilling program is being planned later this year. This follows the company’s drilling program in 2018 which defined a significant, high-grade, open cut tin mineral resource.
The Cleveland project contains a significant resource of tin-copper amenable to both open cut and underground mining techniques, located in a world-class mining district with excellent infrastructure.
Elementos has undertaken a regional geological review looking for opportunities to identify further tin mineralisation following the successful delineation of a high-grade, open-cut mineable tin resource from its 2018 drilling program.
A prospective region approximately 500min length to the immediate north-east and along strike of the existing mineral resource has been identified.
Reconnaissance mapping of the prospective region has confirmed the presence of the geological mine sequence hosting the Cleveland mineral resources.
Corporate update
Elementos has advised that the company’s wholly owned subsidiary, Minas de Estano De Espana (Mespa), being the holder of the company’s Oropesa Project, has been served with legal proceedings in Spain in relation to alleged historic actions of a former subsidiary of Mespa, Minas De Estano D Extremadura, S.L. (Mesex) in 2015.
While the proceedings are currently at a preliminary stage, they make various allegations in relation to the acts of, among others, Eurotin (the former owner of the Oropesa Project) and its subsidiary Stannico Resources Inc in respect of their respective dealings with a separate Spanish Lithium Project, which was held by Mesex.
The proceedings do not relate to the Oropesa Project and do not seek to challenge its validity or ownership.
However, Elementos understands that Mespa has been joined as it had originally incorporated Mesex in February 2011 before subsequently transferring all of those shares to Stannico in October 2011, with the alleged actions purported to have occurred in 2015.
Chairman loan update
Elementos chairman, Andy Greig has advised that he will exercise 30,303,030 share options currently held with an exercise price of 0.9 cents per option and expiry of August 31, 2022.
The board has agreed to convert $272,727 of the current outstanding loan balance of $750,000 owing to Greig to fund the exercise of the share options.
Offtake partners
Elementos has been fielding significant interest in the proposed tin concentrate offtake that will be generated when Oropesa is brought into production.
The company is assessing its strategy regarding offtake and marketing of its proposed concentrate as this can be a critical part of the project finance and overall funding negotiation.