Elementos Ltd (ASX:ELT, OTC:ELTLF) had a busy September quarter as it progresses its two high-grade tin projects in stable jurisdictions towards production during a period of strong tin market fundamentals.
The company’s portfolio consists of two near-term assets, the Oropesa Project in Spain – one of the world’s largest, open-cut mineable tin deposits – and the Cleveland Project, in Tasmania, which is a tin-copper resource amenable to open cut and underground mining techniques, in a premium mining district with established infrastructure.
Financial overview
Elementos used A$522,000 net cash in operating activities, with a further A$761,000 spent on investment.
Financing netted Elementos $996,000 in the quarter, contributing to the A$5.25 million the company held in cash by the end of the September period, which constitutes 4.1 quarters of funding available.
ELT joins European Raw Materials Alliance
Elementos has joined the European Raw Materials Alliance (ERMA), an alliance co-funded by the European Union (EU) in 2020 to strengthen European raw material value chains.
The ERMA was established to ensure a reliable, secure and sustainable access to raw materials, with additional focus on metals, minerals and advanced materials that are the key enablers for a globally competitive, green and digital Europe.
“Elementos is delighted to be accepted into the ERMA. The ERMA is the key body within Europe that identifies and supports the development of the raw materials (mining) value-chain projects,” Elementos CEO Joe David said in the company’s quarterly report.
“As major economies rapidly move toward securing the supply of critical minerals, of which tin is listed, Elementos will continue to work with governments (and their nominated organisations) to ensure our tin projects feed into the value chains where warranted.”
Tin price gains
The tin cash settlement price rose by approximately 11.5% during the reporting period. The London Metal Exchange (LME) tin price at the end of reporting period was US$36,550/tonne.
Tin LME spot cash prices have now remained above US$30,000 for over five months. In addition, tin 3-month and 15-month forward prices have held above US$32,000 and US$30,000 respectively for over four months.
Chinese tin prices also continue to trade at a significant premium, with Shanghai Metals Market reporting all-time highs, US$45,757/tonne, with tin metal premium to LME US$6000/tonne, +15%.
The price increase appears to be driven by a fundamental undersupply of tin into the market which has increasing demand and global warehouse stocks at record lows.
Operational updates
During the quarter, Elementos completed a diamond drilling exploration program at Oropesa that began in the fourth quarter of 2020. The program’s principal objectives were to:
- Upgrade the confidence of existing inferred resources to a higher JORC classification;
- Confirm near-surface, possibly fault controlled mineralisation that is not currently included in the 2018 geological resource model;
- Investigate additional near-surface resources from exploration targets identified from Induced Polarisation (IP) geophysical survey anomalies; and
- Estimate a new JORC geological resource as part of a wider optimisation program designed to increase the project’s overall resource, annual production rate and mine life.
The drilling component of the program was completed with a total of 46 diamond drill holes for 5,654 metres. The final assays were received on September 28, and the mineral resource estimate is targeting completion in early Q4.
Following an exploration and reconnaissance mapping program conducted at the Cleveland Project during the first quarter of 2021, Elementos designed a diamond drilling program comprising four drill holes, totalling 1000 metres, to test historical SP anomalies along strike to the northeast of the current resource.
Elementos received approval for a standard Work Program from Mineral Resources Tasmania for the drilling program during September.
Site preparation work for the commencement of the drilling program is planned to be completed during the next reporting period, following delays due to COVID restrictions.
ESG position statement
Elementos established an Environmental, Social and Governance (ESG) position statement as part of its desire to mature its global tin assets into production in a responsible way.
Elementos developed this statement via a strategic review with boutique global ESG and project advisory firm, Adaptus. The review established visibility on material ESG themes through:
- A detailed analysis of relevant statutory and voluntary ESG disclosure and reporting frameworks;
- Analysis of applicable mining industry standards and trends for sustainability;
- Analysis of current compliance requirements and emerging regulatory and social licence trends in Spain, Australia and the EU; and
- Analysis of stated ESG requirements of the investor and lending community.
Elementos included this statement in its 2021 Annual Report and plans to report on its ESG progress as part of its Annual Report each year.