Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF) has agreed to sell a 1% net smelter return (NSR) royalty on its Sleitat tin-silver project in Alaska to Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF).
Under the agreement, Cornish Metals will receive 1.0 million shares in Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) and C$100,000 (£59,200) in cash. The consideration shares will be subject to a voluntary lock-up agreement which provides that 50% will be subject to a hold period of 6 months and 50% subject to a hold period of 12 months. The transaction is subject to completion of due diligence, approval of the TSX Venture Exchange and other customary conditions.
In a statement, Brendan Yurik, CEO of Electric Royalties commented: "We are tremendously excited about adding the first tin royalty to our metals portfolio. Tin prices have appreciated more than 90% in the past year and we believe projections for tin demand remain very bullish for the foreseeable future.
"In Sleitat, we have transacted on one of the very few hard rock tin assets in North America. We believe securing a tin asset in a Tier 1 jurisdiction is particularly valuable in that China and Indonesia alone were responsible for more than 54% of global tin mine production in 2020. The United States currently has no tin reserves, hasn't produced tin domestically since 1993 and imported 32,000 tonnes of refined tin in 2020. A 2017 paper by the USGS reviewed the tin supply situation and identified Sleitat as one of only two tin deposits in the US with potential to be economically viable, he added.
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The Sleitat Project was originally discovered by Cominco American Inc. in 1983 and is comprised of claims totalling 1,425 hectares. The greisen bodies which host the mineralisation at Sleitat are divided into a north and a south zone. The north zone has been investigated by a total of 14 holes in three drill campaigns and has demonstrated that the tin mineralisation is shallow thus potentially amenable to open pit mining. The North zone is open laterally and at depth while the south greisen remains completely untested to date.
Preliminary metallurgical testing by Cominco in 1984 indicates that the mineralised material is highly amenable to gravity processes with excellent potential for heavy media separation. The overall recovery of tin from this test was 83% (+5%, -10%) and no mention was made of deleterious elements from the sample.
In June of 1989, the property was the subject of a detailed geological, geochemical, geophysical and resource evaluation undertaken by US Bureau of Mines (USBM), at this time an 816 kg bulk sample was also collected and analysed. As part of this study a historical "inferred resource" of 25.9 million tonnes at 0.224% to 0.37% tin was estimated.
Sleitat Tin-Silver royalty acquisition highlights:
- One of two projects identified by the USGS as a potentially economic tin deposit within the United States
- Significant historical inferred resource at favorable grades with notable drill intercepts including: 3.1 meters at 12.55% tin and 197 grams per ton (g/t) silver within a larger intercept of 29.1 meters at 1.56% tin and 28 g/t silver; 18.3 meters at 0.76% tin and 4.6 g/t silver within a larger intercept of 104.4 meters at 0.24% tin and 6.5 g/t silver; and 22.7 meters at 0.67% tin and 3.6 g/t silver within a larger intercept of 61.26 meters at 0.38% tin and 4.9 g/t silver
- Minimal drilling below depth of 100 meters
- North Zone is open laterally and at depth
- South Zone remains completely untested to date
Electric Royalties is a royalty company established to take advantage of the demand for a wide range of commodities (lithium, vanadium, manganese, tin, graphite, cobalt, nickel, zinc & copper) that will benefit from the drive toward electrification of a variety of consumer products: cars, rechargeable batteries, large scale energy storage, renewable energy generation and other applications.
The company has a growing portfolio of 18 royalties, including one royalty that currently generates revenue. It is focused predominantly on acquiring royalties on advanced stage and operating projects to build a diversified portfolio located in jurisdictions with low geopolitical risk, which offers investors exposure to the clean energy transition via the underlying commodities required to rebuild the global infrastructure over the next several decades towards a decarbonized global economy.
-- Updates with Electric Royalties statement --
Contact the author at jon.hopkins@proactiveinvestors.com