First Tin, a tin development company with advanced, low capex projects in both Germany and Australia, today publishes its final audited results for the year ended 31 December 2022. (https://www.commodity-tv.com/ondemand/companies/profil/first-tin-ltd/)
Highlights
Thomas Buenger, Chief Executive Officer, commented:
“2022 has been a year of a strong operational performance for First Tin at both our assets in Australia and Germany. We expect 2023 to be another busy and exciting year for us where we will continue to build on the momentum achieved last year to add further value to our assets.
“This will be achieved through the completion of our DFS at Taronga and the release of updated resources for each project in 2023. We have already gathered a significant amount of data from both, and with no red flags having emerged to date, we remain optimistic for the future.
“Our macro view of the tin market remains bullish with tin spot prices having risen in recent years, with record highs in March 2022 of US$49,000 per tonne. It is clear that the demand for tin will remain strong in the years ahead as the metal continues to be an important component for soldering electronics including semiconductors, solar panels, electronic systems in electric vehicles (EVs) and batteries. These significant drivers, together with a rapid increase in battery production and the rise of big data, are expected to create a material tin deficit from 2025 and we are confident that First Tin remains well positioned to take advantage of this opportunity and become a material tin supplier from its conflict-free and low political risk jurisdictions.”
Analyst Presentation
There will be a Zoom webinar for equity analysts at 10:30am BST on the day of results, hosted by Thomas Buenger, CEO. Any analysts wishing to register for the event should email firsttin@secnewgate.co.uk.
Investor Presentation Reminder
Additionally, Thomas Buenger will provide a live presentation for investors via the Investor Meet Company platform at 09:00am BST on the day of results.
The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9:00am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and click "Add to Meet" First Tin via:
https://www.investormeetcompany.com/first-tin-plc/register-investor
Enquiries:
First Tin
Via SEC Newgate below
Thomas Buenger - Chief Executive Officer
Arlington Group Asset Management Limited (Financial Advisor and Joint Broker)
Simon Catt
020 7389 5016
WH Ireland Limited (Joint Broker)
Harry Ansell
020 7220 1670
SEC Newgate (Financial PR)
Elisabeth Cowell / Molly Gretton / Matthew Elliott
Firsttin@secnewgate.co.uk
Swiss Resource Capital AG
Jochen Staiger
info@resource-capital.ch
CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022
Despite the Company facing strong macro headwinds which included higher inflation rates, supply chain issues, Covid-19 lockdowns in China and the threat of a global recession, I am pleased to report on the strong operational progress that the Company has made during the year ended 31 December 2022, our first as a listed company. First Tin came to market in April 2022, successfully raising £20m to progress its two low capex, high margin tin assets, located in the Tier 1 jurisdictions of Australia (Taronga) and Germany (Tellerhäuser).
With both of the Company’s assets having demonstrated compelling economics at today’s tin price of US$25,000 in previous independent studies, the Company has rapidly set to work on commencing Definitive Feasibility Studies (“DFS”) at each asset to capitalise on the advanced nature of our projects. While we have experienced some minor delays at Tellerhäuser due to issues with our drilling contractor, we have made strong operational progress at Taronga and aim to complete the DFS there by the end of 2023 as previously indicated. During the period under review, First Tin undertook substantial drill programmes at both our assets after a period of over 40 years of inactivity at each project. These have confirmed historical mineralisation at both Taronga and Tellerhäuser, as well proving up extensions to the previously known resources, highlighting the strong potential to increase the overall resource and create exploration upside. Substantial progress has also been made in proving up the mineral processing and final flow sheets at both assets and in developing sustainable solutions for their respective water and power requirements.
Whilst the ongoing macro-economic challenges during the period certainly had a material short term negative impact on the spot tin price, post period end the spot price has started to strengthen again, and with a significant tin deficit anticipated by the International Tin Association (ITA) from 2025 onwards, we are hopeful that higher prices will emerge in future periods. The Company still aims to have both of its assets enter production during this deficit period in order to help mitigate this future supply gap and to take advantage of any increases in the tin price.
The surge in demand for tin in the next decade will be driven by the global transition to clean energy and technological revolutions. Tin remains crucial in the creation of any electronic device found in electric vehicles, computers and control equipment, power transmission and other renewable technologies. In particular, the rise in the solar, battery and big data industries is expected to drive demand. Electric vehicles now amount to 15% of car sales after record sales in 2021 and 2022 and are expected to rise to 60% of sales by 2030. Solar power generation also experienced strong growth at 40% year-on-year, and data storage requirements are expected to increase 10-fold by 2030. It is therefore essential that this demand is met by companies that are dedicated to supplying tin responsibly. Currently, 97% of global tin supply comes from emerging or developing economies, with tin mining in these regions often linked to local conflicts and poor ESG standards and practices. Indeed, most of the world’s tin comes from alluvial mining, a highly unsustainable and environmentally damaging practice. Conversely, First Tin is focused on becoming a sustainable, professional, responsible, and regulated tin supplier in conflict-free, low political risk jurisdictions.
During the period under review, it was pleasing to report that Taronga Mines Pty Ltd, an Australian registered, 100% owned subsidiary of First Tin, was awarded a significant grant of A$494,038 by the Government of New South Wales in Australia under its Critical Minerals and High-Tech Metals Activation Fund. The grant reinforces the support and commitment we have from the Government and will help fund the ongoing development on this important tin deposit.
We were also pleased to welcome Nick Mather to the Board as a Non-Executive Director on 30 September 2022. Nick has 40 years' experience in all aspects of resource exploration and brings technical expertise and a track record of successful business development which will be valuable as we focus on achieving the Company's objective of becoming a low-cost tin producer, through exploration and development of our two flagship assets in Germany and Australia.
First Tin’s commitment to strong Environmental, Social and Governance (ESG) principles has been at the forefront of our Company since inception, and we remain committed to developing a conflict-free source of tin through sustainable, professional, responsible, and regulated mining. In line with this, in April 2023 (post period end), we signed a partnership agreement with BID Energy Partners, an Australia based energy company specialising in strategy, project development and delivery of renewable energy projects, to provide a feasibility study on renewable energy supply options for Taronga. This workstream is designed to benefit all our stakeholders.
Looking to the future of First Tin, we remain confident in our ability to progress both our assets in Australia and Germany. The global clean energy and technological revolutions and resultant significant future demand for tin, remain an exciting opportunity to First Tin and our ability to deliver a sustainable answer to the global supply shortage, remains our focused objective.
I would like to take this opportunity to thank my fellow Directors, the First Tin team and our shareholders for their ongoing commitment and support as we strive for another busy and successful year ahead.
C Cannon Brookes
Chairman
CHIEF EXECUTIVE OFFICER’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022
I am pleased to report that 2022 saw First Tin make strong progress in developing both of our assets in Australia and Germany, with the ultimate goal of delivering on a low-capex, value-accretive path to achieve annual tin production of 6,000 tonnes or more.
We have achieved a range of milestones towards this objective since listing on the London Stock Exchange in April 2022 and in just one year have rapidly put the building blocks in place to progress Definitive Feasibility Studies ("DFS") at both of our assets. We also began our fully funded deep drilling operations at Tellerhäuser, Germany and commenced drilling at our Taronga Tin project in Australia, with the intention of expanding the existing resources at each asset.
The period under review has not been without its challenges, with the ongoing war in Ukraine, impact of China’s strict Covid-19 lockdowns and fears of a global recession all putting extreme pressure on the spot tin price. However, our assets show robust economics at US$25,000 tin and we have confidence that our production schedule is well aligned with a sustained tin deficit forecast from 2025, which has the potential to create significant price rises.
This deficit is being driven by tin’s role as a critical metal, vital for the decarbonisation and electrification of the world. Yet Europe has very little tin supply, particularly from conflict-free jurisdictions such as those in which we operate. Increasing EV uptake and the surge in solar and data centres is driving demand, yet Indonesia, which at 34% is the largest producer of primary tin globally, has stated its intention to reduce non-beneficiated tin metal exports in favour of manufactured tin products, while consumer stocks of tin remain at historical low.
Together, First Tin’s assets represent the 5th largest undeveloped tin reserves globally, outside China, Russia, Kazakhstan and the Democratic Republic of Congo. They are located in tier 1 jurisdictions and have been de-risked significantly, with extensive historical work undertaken to date. We intend to deliver a new, ESG compliant source of tin and the solid economics that our assets have already demonstrated (by scoping and pre-feasibility studies) provides the Company with significant leverage to higher tin prices.
Taronga – Australia
Our Taronga project, situated in New South Wales, is a low risk asset in a low risk jurisdiction. Acquired in 2022 by First Tin, it is surrounded by excellent existing infrastructure and benefits from over a century of development and abundant underexplored tin showings, providing major exploration upside potential. Significant exploration work was undertaken by BHP in 1933, 1958, and 1964, and by the Newmont Joint Venture from 1979 to 1983.
Following the commencement of a DFS in August 2022, First Tin began drilling operations just a month later. Diamond drilling was conducted with the aim of confirming historical data by twinning historical holes drilled by Newmont, while RC drilling focused on testing for extensions to the south of Newmont's Southern Zone deposit in order to add tonnage to the Indicated Resources.
Diamond drilling was completed post period end with a total of 1,619m drilled in 12 holes. Pleasingly, the results have confirmed the previous Newmont results with the alignment between First Tin and Newmont’s drillholes generally being very good.
RC extension drilling is ongoing, but we were pleased to report in January 2023 that the programme to date has extended the known mineralisation by approximately 400m to the south of the Newmont area and is still open to the south. 2,435m have been completed to date (1,957m of infill and extension drilling completed in 13 drillholes and 478m twin drilling completed in four drillholes) with better results including (downhole widths):
Drilling has also been undertaken in an area previously assumed to be barren, in the centre of the Newmont resource area. To date, results have been received for one drillhole which returned several zones of tin mineralisation. This confirms that tin mineralisation continues in this previously assumed barren zone and has enabled a revised geological interpretation of the mineralisation as being semi-continuous across this zone.
As well as drilling for confirmatory and extension purposes, 670m of diamond drilling has been completed for geotechnical purposes and 300m of RC drilling has been completed for ground-water monitoring.
The fully funded DFS continues at pace, and is on track to be completed by the end of 2023. The project is shaping up well, with alternative energy studies highlighting the economic and social licence benefits of using low carbon power generation, in line with our corporate values. In line with this, post period end we were pleased to sign an agreement with BID Energy Partners to provide a feasibility study on renewable energy supply options for the Taronga Tin Project in Australia. Taronga is well placed to take advantage of renewable energy as it is located within the New England Renewable Energy Zone (“REZ”), one of the priority REZs in New South Wales. It has high solar capacity and good wind speed characteristics, and is located very close to a power line.
Our Environmental Impact Study is also progressing positively. We are also advancing mineral processing studies and no red flags have been identified to date. We are pleased to confirm that results so far, underpin our previous hypotheses that most tin will be liberated via a simple coarse crush.
Most data collection is planned to be completed and results received in H1 or early H2, when some major decisions concerning the size and style of operation will be finalised and the Feasibility Study can progress from that point forward with a single option. We look forward to sharing more results as they come to hand.
I am also delighted to note that the New South Wales (NSW) government has shown its support for the project by providing a grant of almost A$0.5M to the project from its Critical Minerals and High-Tech Metals Activation Fund.
Germany
Tellerhäuser
Our Tellerhäuser project is one of the world’s most advanced tin deposits. It is located in the tin district of Saxony, which enjoys an exceptionally long history of mining, and has an active Mining Licence for the extraction of mineral resources valid until 30 June 2070. It has major existing infrastructure benefits which ensure that future development capital expenditure will remain low.
A Scoping Study, undertaken in 2021, demonstrated that an operation with a throughput rate of 500,000 tonnes per annum is financially robust with a low projected start-up capital expenditure of US$49 million, which, at US$30,000 per tonne of tin, suggested a Net Present Value ("NPV") of US$264 million (using an 8% discount rate) and an Internal Rate of Return ("IRR") of 58%.
We commenced a DFS in the summer of 2022 and began drilling as part of this. This programme has been focused on adding high grade tin mineralisation from the Dreiberg zone to the Indicated Resources already present at the project, thus enabling it to be used for economic evaluation under JORC guidelines. We successfully intersected high grade tin mineralisation at depth along strike from the known resources at the Tellerhäuser project from each of the four holes drilled, returning the following intercepts.
These highly encouraging drilling results have confirmed the skarn horizon is present, continuous and tin mineralised as was previously identified by Wismut over 40 years ago. This suggests that the skarn horizon is continuous for at least 1.5km southeast of the Indicated Resources at Dreiberg and is open to the southeast.
The next Dreiberg hole, the fifth drilled by First Tin, is scheduled to commence in Q2 2023. Should this also prove successful, the programme may be expanded to define additional Indicated Resources in the Dreiberg area.
We are currently in the process of selecting a new drilling contractor due to the poor performance of the previous one which has put the proposed drilling programme behind schedule by around six-months. Unfortunately, this means that the DFS at Tellerhäuser is now targeted to be completed in 2024 instead of end of 2023, as previously expected. However, with the forthcoming tin deficit expected to be of a long-term nature, our project is still well aligned to provide critical supply to meet rising demand.
On a more pleasing note, drilling to date has obtained enough drill core to undertake mineral processing test work from Dreiberg with half of the core from the drillholes being sent to ALS in Burnie, Australia. This will be the first mineral processing testwork conducted on Dreiberg mineralisation in over 40 years and will be useful as variability testwork for the project as a whole.
Another recent pleasing development is the discovery of a considerable amount of additional historical drilling data for the Tellerhäuser project area. Following granting of the Mining Licence in 2021, Saxore was able to request additional historic data, in particular drillholes targeting uranium mineralisation, that were also assayed for tin and other metals.
This data is currently being added to the main database and should result in a more robust resource model and may lead to additional resource tonnes being added very cost effectively. The additional identified data represents an equivalent of around 3,500m of core drilling from surface, 4,500m of core drilling from underground and a number of other channel samples. Based on the new data from the Tellerhäuser drilling programme, plus the additional historical data recently received, we expect to publish an updated JORC compliant Resource Statement for Tellerhäuser in June/July 2023.
While waiting for additional drilling results to be returned and while the new historical drilling data is being analysed, the DFS will continue to progress and will focus on the areas of mineral processing as well as investigating optimal mining methods, mine access and environmental studies. All these activities are well financed until end of 2023. A potential adjusted and extended drilling programme for Tellerhäuser based on the results of the updated Resource Statement may require further funding beyond the existing budget.
Furthermore, post period end we received good news in respect to the permitting process at Tellerhäuser, with the Saxonian Mining Authority confirming the asset’s eligibility to move straight to the construction and operational permitting process. This reduces the overall permitting timeframe by a period of up to 12-18 months. This decision was made due to the minimal environmental footprint that the project is anticipated to have throughout both the construction and production phases.
Gottesberg
During the period, we also commenced drilling at our Gottesberg project, which we believe represents a possible satellite orebody development for processing at Tellerhäuser, due to its close proximity. A historical project of historic significance, it has an existing JORC resource of 42.1Mt grading 0.27% Sn (114,000t tin).
16 holes have been drilled for a total length of 2080.5m across seven drill sites in the project area, and we have been pleased with the results to date, which have confirmed a higher-grade section within the existing resource. This has validated the Board's belief that a higher-grade core exists within the large but moderate grade deposit. Of particular note was a high-grade intercept of 73.3m @ 0.49% tin from 91.7m which included 15.6m @ 0.74% tin from 149.4m.
MOU with ERF
During the period, First Tin signed a non-binding Memorandum of Understanding ("MOU") with Ecobat Resources Freiberg GmbH ("ERF"), a market leader in the collection, recycling, production, and distribution of resources for battery systems. Our intention is to jointly establish a fully integrated 'mine to metal' value chain in Germany, which is closely aligned with our strategy to provide a fully traceable, ESG compliant supply of tin to Germany and the EU from conflict-free locations.
ESG
First Tin is committed to provide an ethically sourced supply of tin through sustainable, professional, responsible, and regulated mining. Our priorities remain to minimize our CO2 footprint from an early stage by utilising renewable energy and by using electrification options wherever possible for future mine equipment. We focus on safety as one of the Company’s core values and aim for a fatality, injury and illness free workplace.
The Company will also try to minimise its environmental footprint through identification and implementation of “leave-no-trace solutions” wherever possible and will operate in an ethical and respectful way that is built on a transparent relationship with local communities and their culture and laws. Wherever possible First Tin will source goods and hire employees locally and will plan to leave a positive legacy on its local environment.
During the period under review, First Tin received its inaugural environmental, social and governance (ESG) rating from Digbee. Digbee is a leading independent assessment platform for ESG disclosure in the mining industry. Based on ESG achievements in the Company’s first six months of operations since listing on the London Stock Exchange in April 2022, First Tin achieved an overall rating of BB.
The Digbee ESG assessment is a further demonstration of our commitment to transparent reporting of our performance and progress as we work to achieve the highest levels of ESG compliance and practice across our operations.
Finance Review
In respect of the financial results, First Tin posted a comprehensive loss for the period of £3.1m and ended the period with a healthy cash position of £13.8m and a net asset value of £41.8m. Expenditure during the period was primarily focussed on drilling activities and other DFS related costs as well as on strategic land and property acquisitions. The Company believes that it has adequate cash resources to fund its operating activities throughout 2023 allowing it to deliver a DFS study at Taronga in late 2023 while at the same time advancing the DFS work currently ongoing at Tellerhäuser.
Outlook
2022 has been a year of a strong operational performance for First Tin at both our assets in Australia and Germany. We expect 2023 to be another busy and exciting year for us where we will continue to build on the momentum achieved last year to add further value to our assets.
This will be achieved through the completion of our DFS at Taronga and the delivery of updated resources for each project in 2023. We have already gathered a significant amount of data from both, and with no red flags having emerged to date, we remain optimistic for the future.
Our macro view of the tin market remains bullish with tin spot prices having risen in recent years, with record highs in March 2022 of US$49,000 per tonne. It is clear that the demand for tin will remain strong in the years ahead as the metal continues to be an important component for soldering electronics including semiconductors, solar panels, electronic systems in electric vehicles (EVs) and batteries. These significant drivers, together with a rapid increase in battery production and the rise of big data, are expected to create a material tin deficit from 2025 and we are confident that First Tin remains well positioned to take advantage of this opportunity and become a material tin supplier from its conflict-free and low political risk jurisdictions.
We have the right strategy and business model to unlock the significant value potential of our tin assets and pursue our purpose to develop a sustainable tin mining company to generate a long-term value for all our stakeholders.
Mr. T Buenger
Chief Executive Officer
Highlights
- Significant progress in the development of the Company’s portfolio of tin assets since listing the Company on the Standard List of the London Stock Exchange in April 2022
- Successful £20m fundraise at IPO, enabling the Company to commence Definitive Feasibility Studies at both assets in order to add substantial value and drive the projects towards production
- Ended the period with a significant cash position of £13.8m (31 December 2021: £2.5m)
- Loss before tax of £3.2m (31 December 2021: £1.2m) reflecting a ramp up in operational activities
- The fully funded DFS continues at pace at Taronga, Australia:
- Diamond drilling confirmed the previous Newmont exploration results with good alignment between First Tin and Newmont’s historical drillholes
- Reverse Circulation drilling has extended the known mineralisation by approximately 400m to the south of the previously defined Newmont area with mineralisation still open and drilling ongoing
- Post period end, First Tin signed an agreement with BID Energy Partners to provide a feasibility study on renewable energy supply options which has the potential to materially reduce the power costs of the project, supports permitting and is aligned with First Tin’s desire to have the highest ESG credentials for the benefit of all our stakeholders
- The Environmental Impact Study is also progressing positively and results from ongoing mineral processing studies so far confirm the previous hypotheses that a majority of the tin will be liberated via a simple coarse crush, followed by gravity separation
- New South Wales government has shown its support by providing a cash grant of almost A$0.5M to the project from its Critical Minerals and High-Tech Metals Activation Fund
- Highly encouraging results to date from DFS drilling at Tellerhauser
- Saxonian Mining Authority has confirmed eligibility to move straight to the construction and operational permitting process, reducing the overall permitting timeframe by up to 12-18 months
- Holes returned to date have confirmed the skarn horizon is present, continuous and tin mineralised as previously identified by Wismut over 40 years ago
- Discovery of a considerable amount of additional historical drilling data which should result in a more robust resource model and may lead to additional resource tonnes being added cost effectively
- Signed a Memorandum of Understanding ("MOU") with Ecobat Resources Freiberg GmbH ("ERF”) with the intention to jointly establish a fully integrated 'mine to metal' value chain in Germany
- Inaugural ESG rating received from Digbee, demonstrating First Tin’s commitment to transparent reporting of its performance and progress
Thomas Buenger, Chief Executive Officer, commented:
“2022 has been a year of a strong operational performance for First Tin at both our assets in Australia and Germany. We expect 2023 to be another busy and exciting year for us where we will continue to build on the momentum achieved last year to add further value to our assets.
“This will be achieved through the completion of our DFS at Taronga and the release of updated resources for each project in 2023. We have already gathered a significant amount of data from both, and with no red flags having emerged to date, we remain optimistic for the future.
“Our macro view of the tin market remains bullish with tin spot prices having risen in recent years, with record highs in March 2022 of US$49,000 per tonne. It is clear that the demand for tin will remain strong in the years ahead as the metal continues to be an important component for soldering electronics including semiconductors, solar panels, electronic systems in electric vehicles (EVs) and batteries. These significant drivers, together with a rapid increase in battery production and the rise of big data, are expected to create a material tin deficit from 2025 and we are confident that First Tin remains well positioned to take advantage of this opportunity and become a material tin supplier from its conflict-free and low political risk jurisdictions.”
Analyst Presentation
There will be a Zoom webinar for equity analysts at 10:30am BST on the day of results, hosted by Thomas Buenger, CEO. Any analysts wishing to register for the event should email firsttin@secnewgate.co.uk.
Investor Presentation Reminder
Additionally, Thomas Buenger will provide a live presentation for investors via the Investor Meet Company platform at 09:00am BST on the day of results.
The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9:00am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and click "Add to Meet" First Tin via:
https://www.investormeetcompany.com/first-tin-plc/register-investor
Enquiries:
First Tin
Via SEC Newgate below
Thomas Buenger - Chief Executive Officer
Arlington Group Asset Management Limited (Financial Advisor and Joint Broker)
Simon Catt
020 7389 5016
WH Ireland Limited (Joint Broker)
Harry Ansell
020 7220 1670
SEC Newgate (Financial PR)
Elisabeth Cowell / Molly Gretton / Matthew Elliott
Firsttin@secnewgate.co.uk
Swiss Resource Capital AG
Jochen Staiger
info@resource-capital.ch
CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022
Despite the Company facing strong macro headwinds which included higher inflation rates, supply chain issues, Covid-19 lockdowns in China and the threat of a global recession, I am pleased to report on the strong operational progress that the Company has made during the year ended 31 December 2022, our first as a listed company. First Tin came to market in April 2022, successfully raising £20m to progress its two low capex, high margin tin assets, located in the Tier 1 jurisdictions of Australia (Taronga) and Germany (Tellerhäuser).
With both of the Company’s assets having demonstrated compelling economics at today’s tin price of US$25,000 in previous independent studies, the Company has rapidly set to work on commencing Definitive Feasibility Studies (“DFS”) at each asset to capitalise on the advanced nature of our projects. While we have experienced some minor delays at Tellerhäuser due to issues with our drilling contractor, we have made strong operational progress at Taronga and aim to complete the DFS there by the end of 2023 as previously indicated. During the period under review, First Tin undertook substantial drill programmes at both our assets after a period of over 40 years of inactivity at each project. These have confirmed historical mineralisation at both Taronga and Tellerhäuser, as well proving up extensions to the previously known resources, highlighting the strong potential to increase the overall resource and create exploration upside. Substantial progress has also been made in proving up the mineral processing and final flow sheets at both assets and in developing sustainable solutions for their respective water and power requirements.
Whilst the ongoing macro-economic challenges during the period certainly had a material short term negative impact on the spot tin price, post period end the spot price has started to strengthen again, and with a significant tin deficit anticipated by the International Tin Association (ITA) from 2025 onwards, we are hopeful that higher prices will emerge in future periods. The Company still aims to have both of its assets enter production during this deficit period in order to help mitigate this future supply gap and to take advantage of any increases in the tin price.
The surge in demand for tin in the next decade will be driven by the global transition to clean energy and technological revolutions. Tin remains crucial in the creation of any electronic device found in electric vehicles, computers and control equipment, power transmission and other renewable technologies. In particular, the rise in the solar, battery and big data industries is expected to drive demand. Electric vehicles now amount to 15% of car sales after record sales in 2021 and 2022 and are expected to rise to 60% of sales by 2030. Solar power generation also experienced strong growth at 40% year-on-year, and data storage requirements are expected to increase 10-fold by 2030. It is therefore essential that this demand is met by companies that are dedicated to supplying tin responsibly. Currently, 97% of global tin supply comes from emerging or developing economies, with tin mining in these regions often linked to local conflicts and poor ESG standards and practices. Indeed, most of the world’s tin comes from alluvial mining, a highly unsustainable and environmentally damaging practice. Conversely, First Tin is focused on becoming a sustainable, professional, responsible, and regulated tin supplier in conflict-free, low political risk jurisdictions.
During the period under review, it was pleasing to report that Taronga Mines Pty Ltd, an Australian registered, 100% owned subsidiary of First Tin, was awarded a significant grant of A$494,038 by the Government of New South Wales in Australia under its Critical Minerals and High-Tech Metals Activation Fund. The grant reinforces the support and commitment we have from the Government and will help fund the ongoing development on this important tin deposit.
We were also pleased to welcome Nick Mather to the Board as a Non-Executive Director on 30 September 2022. Nick has 40 years' experience in all aspects of resource exploration and brings technical expertise and a track record of successful business development which will be valuable as we focus on achieving the Company's objective of becoming a low-cost tin producer, through exploration and development of our two flagship assets in Germany and Australia.
First Tin’s commitment to strong Environmental, Social and Governance (ESG) principles has been at the forefront of our Company since inception, and we remain committed to developing a conflict-free source of tin through sustainable, professional, responsible, and regulated mining. In line with this, in April 2023 (post period end), we signed a partnership agreement with BID Energy Partners, an Australia based energy company specialising in strategy, project development and delivery of renewable energy projects, to provide a feasibility study on renewable energy supply options for Taronga. This workstream is designed to benefit all our stakeholders.
Looking to the future of First Tin, we remain confident in our ability to progress both our assets in Australia and Germany. The global clean energy and technological revolutions and resultant significant future demand for tin, remain an exciting opportunity to First Tin and our ability to deliver a sustainable answer to the global supply shortage, remains our focused objective.
I would like to take this opportunity to thank my fellow Directors, the First Tin team and our shareholders for their ongoing commitment and support as we strive for another busy and successful year ahead.
C Cannon Brookes
Chairman
CHIEF EXECUTIVE OFFICER’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022
I am pleased to report that 2022 saw First Tin make strong progress in developing both of our assets in Australia and Germany, with the ultimate goal of delivering on a low-capex, value-accretive path to achieve annual tin production of 6,000 tonnes or more.
We have achieved a range of milestones towards this objective since listing on the London Stock Exchange in April 2022 and in just one year have rapidly put the building blocks in place to progress Definitive Feasibility Studies ("DFS") at both of our assets. We also began our fully funded deep drilling operations at Tellerhäuser, Germany and commenced drilling at our Taronga Tin project in Australia, with the intention of expanding the existing resources at each asset.
The period under review has not been without its challenges, with the ongoing war in Ukraine, impact of China’s strict Covid-19 lockdowns and fears of a global recession all putting extreme pressure on the spot tin price. However, our assets show robust economics at US$25,000 tin and we have confidence that our production schedule is well aligned with a sustained tin deficit forecast from 2025, which has the potential to create significant price rises.
This deficit is being driven by tin’s role as a critical metal, vital for the decarbonisation and electrification of the world. Yet Europe has very little tin supply, particularly from conflict-free jurisdictions such as those in which we operate. Increasing EV uptake and the surge in solar and data centres is driving demand, yet Indonesia, which at 34% is the largest producer of primary tin globally, has stated its intention to reduce non-beneficiated tin metal exports in favour of manufactured tin products, while consumer stocks of tin remain at historical low.
Together, First Tin’s assets represent the 5th largest undeveloped tin reserves globally, outside China, Russia, Kazakhstan and the Democratic Republic of Congo. They are located in tier 1 jurisdictions and have been de-risked significantly, with extensive historical work undertaken to date. We intend to deliver a new, ESG compliant source of tin and the solid economics that our assets have already demonstrated (by scoping and pre-feasibility studies) provides the Company with significant leverage to higher tin prices.
Taronga – Australia
Our Taronga project, situated in New South Wales, is a low risk asset in a low risk jurisdiction. Acquired in 2022 by First Tin, it is surrounded by excellent existing infrastructure and benefits from over a century of development and abundant underexplored tin showings, providing major exploration upside potential. Significant exploration work was undertaken by BHP in 1933, 1958, and 1964, and by the Newmont Joint Venture from 1979 to 1983.
Following the commencement of a DFS in August 2022, First Tin began drilling operations just a month later. Diamond drilling was conducted with the aim of confirming historical data by twinning historical holes drilled by Newmont, while RC drilling focused on testing for extensions to the south of Newmont's Southern Zone deposit in order to add tonnage to the Indicated Resources.
Diamond drilling was completed post period end with a total of 1,619m drilled in 12 holes. Pleasingly, the results have confirmed the previous Newmont results with the alignment between First Tin and Newmont’s drillholes generally being very good.
RC extension drilling is ongoing, but we were pleased to report in January 2023 that the programme to date has extended the known mineralisation by approximately 400m to the south of the Newmont area and is still open to the south. 2,435m have been completed to date (1,957m of infill and extension drilling completed in 13 drillholes and 478m twin drilling completed in four drillholes) with better results including (downhole widths):
- 41m @ 0.20% Sn from surface
- 22m @ 0.12% Sn from 62m
- 19m @ 0.20% Sn from surface
- 9m @ 0.20% Sn from 133m
- 32m @ 0.28% Sn from 118m
- 33m @ 0.18% Sn from 109m
- 56m @ 0.12% Sn from 5m
Drilling has also been undertaken in an area previously assumed to be barren, in the centre of the Newmont resource area. To date, results have been received for one drillhole which returned several zones of tin mineralisation. This confirms that tin mineralisation continues in this previously assumed barren zone and has enabled a revised geological interpretation of the mineralisation as being semi-continuous across this zone.
As well as drilling for confirmatory and extension purposes, 670m of diamond drilling has been completed for geotechnical purposes and 300m of RC drilling has been completed for ground-water monitoring.
The fully funded DFS continues at pace, and is on track to be completed by the end of 2023. The project is shaping up well, with alternative energy studies highlighting the economic and social licence benefits of using low carbon power generation, in line with our corporate values. In line with this, post period end we were pleased to sign an agreement with BID Energy Partners to provide a feasibility study on renewable energy supply options for the Taronga Tin Project in Australia. Taronga is well placed to take advantage of renewable energy as it is located within the New England Renewable Energy Zone (“REZ”), one of the priority REZs in New South Wales. It has high solar capacity and good wind speed characteristics, and is located very close to a power line.
Our Environmental Impact Study is also progressing positively. We are also advancing mineral processing studies and no red flags have been identified to date. We are pleased to confirm that results so far, underpin our previous hypotheses that most tin will be liberated via a simple coarse crush.
Most data collection is planned to be completed and results received in H1 or early H2, when some major decisions concerning the size and style of operation will be finalised and the Feasibility Study can progress from that point forward with a single option. We look forward to sharing more results as they come to hand.
I am also delighted to note that the New South Wales (NSW) government has shown its support for the project by providing a grant of almost A$0.5M to the project from its Critical Minerals and High-Tech Metals Activation Fund.
Germany
Tellerhäuser
Our Tellerhäuser project is one of the world’s most advanced tin deposits. It is located in the tin district of Saxony, which enjoys an exceptionally long history of mining, and has an active Mining Licence for the extraction of mineral resources valid until 30 June 2070. It has major existing infrastructure benefits which ensure that future development capital expenditure will remain low.
A Scoping Study, undertaken in 2021, demonstrated that an operation with a throughput rate of 500,000 tonnes per annum is financially robust with a low projected start-up capital expenditure of US$49 million, which, at US$30,000 per tonne of tin, suggested a Net Present Value ("NPV") of US$264 million (using an 8% discount rate) and an Internal Rate of Return ("IRR") of 58%.
We commenced a DFS in the summer of 2022 and began drilling as part of this. This programme has been focused on adding high grade tin mineralisation from the Dreiberg zone to the Indicated Resources already present at the project, thus enabling it to be used for economic evaluation under JORC guidelines. We successfully intersected high grade tin mineralisation at depth along strike from the known resources at the Tellerhäuser project from each of the four holes drilled, returning the following intercepts.
These highly encouraging drilling results have confirmed the skarn horizon is present, continuous and tin mineralised as was previously identified by Wismut over 40 years ago. This suggests that the skarn horizon is continuous for at least 1.5km southeast of the Indicated Resources at Dreiberg and is open to the southeast.
The next Dreiberg hole, the fifth drilled by First Tin, is scheduled to commence in Q2 2023. Should this also prove successful, the programme may be expanded to define additional Indicated Resources in the Dreiberg area.
We are currently in the process of selecting a new drilling contractor due to the poor performance of the previous one which has put the proposed drilling programme behind schedule by around six-months. Unfortunately, this means that the DFS at Tellerhäuser is now targeted to be completed in 2024 instead of end of 2023, as previously expected. However, with the forthcoming tin deficit expected to be of a long-term nature, our project is still well aligned to provide critical supply to meet rising demand.
On a more pleasing note, drilling to date has obtained enough drill core to undertake mineral processing test work from Dreiberg with half of the core from the drillholes being sent to ALS in Burnie, Australia. This will be the first mineral processing testwork conducted on Dreiberg mineralisation in over 40 years and will be useful as variability testwork for the project as a whole.
Another recent pleasing development is the discovery of a considerable amount of additional historical drilling data for the Tellerhäuser project area. Following granting of the Mining Licence in 2021, Saxore was able to request additional historic data, in particular drillholes targeting uranium mineralisation, that were also assayed for tin and other metals.
This data is currently being added to the main database and should result in a more robust resource model and may lead to additional resource tonnes being added very cost effectively. The additional identified data represents an equivalent of around 3,500m of core drilling from surface, 4,500m of core drilling from underground and a number of other channel samples. Based on the new data from the Tellerhäuser drilling programme, plus the additional historical data recently received, we expect to publish an updated JORC compliant Resource Statement for Tellerhäuser in June/July 2023.
While waiting for additional drilling results to be returned and while the new historical drilling data is being analysed, the DFS will continue to progress and will focus on the areas of mineral processing as well as investigating optimal mining methods, mine access and environmental studies. All these activities are well financed until end of 2023. A potential adjusted and extended drilling programme for Tellerhäuser based on the results of the updated Resource Statement may require further funding beyond the existing budget.
Furthermore, post period end we received good news in respect to the permitting process at Tellerhäuser, with the Saxonian Mining Authority confirming the asset’s eligibility to move straight to the construction and operational permitting process. This reduces the overall permitting timeframe by a period of up to 12-18 months. This decision was made due to the minimal environmental footprint that the project is anticipated to have throughout both the construction and production phases.
Gottesberg
During the period, we also commenced drilling at our Gottesberg project, which we believe represents a possible satellite orebody development for processing at Tellerhäuser, due to its close proximity. A historical project of historic significance, it has an existing JORC resource of 42.1Mt grading 0.27% Sn (114,000t tin).
16 holes have been drilled for a total length of 2080.5m across seven drill sites in the project area, and we have been pleased with the results to date, which have confirmed a higher-grade section within the existing resource. This has validated the Board's belief that a higher-grade core exists within the large but moderate grade deposit. Of particular note was a high-grade intercept of 73.3m @ 0.49% tin from 91.7m which included 15.6m @ 0.74% tin from 149.4m.
MOU with ERF
During the period, First Tin signed a non-binding Memorandum of Understanding ("MOU") with Ecobat Resources Freiberg GmbH ("ERF"), a market leader in the collection, recycling, production, and distribution of resources for battery systems. Our intention is to jointly establish a fully integrated 'mine to metal' value chain in Germany, which is closely aligned with our strategy to provide a fully traceable, ESG compliant supply of tin to Germany and the EU from conflict-free locations.
ESG
First Tin is committed to provide an ethically sourced supply of tin through sustainable, professional, responsible, and regulated mining. Our priorities remain to minimize our CO2 footprint from an early stage by utilising renewable energy and by using electrification options wherever possible for future mine equipment. We focus on safety as one of the Company’s core values and aim for a fatality, injury and illness free workplace.
The Company will also try to minimise its environmental footprint through identification and implementation of “leave-no-trace solutions” wherever possible and will operate in an ethical and respectful way that is built on a transparent relationship with local communities and their culture and laws. Wherever possible First Tin will source goods and hire employees locally and will plan to leave a positive legacy on its local environment.
During the period under review, First Tin received its inaugural environmental, social and governance (ESG) rating from Digbee. Digbee is a leading independent assessment platform for ESG disclosure in the mining industry. Based on ESG achievements in the Company’s first six months of operations since listing on the London Stock Exchange in April 2022, First Tin achieved an overall rating of BB.
The Digbee ESG assessment is a further demonstration of our commitment to transparent reporting of our performance and progress as we work to achieve the highest levels of ESG compliance and practice across our operations.
Finance Review
In respect of the financial results, First Tin posted a comprehensive loss for the period of £3.1m and ended the period with a healthy cash position of £13.8m and a net asset value of £41.8m. Expenditure during the period was primarily focussed on drilling activities and other DFS related costs as well as on strategic land and property acquisitions. The Company believes that it has adequate cash resources to fund its operating activities throughout 2023 allowing it to deliver a DFS study at Taronga in late 2023 while at the same time advancing the DFS work currently ongoing at Tellerhäuser.
Outlook
2022 has been a year of a strong operational performance for First Tin at both our assets in Australia and Germany. We expect 2023 to be another busy and exciting year for us where we will continue to build on the momentum achieved last year to add further value to our assets.
This will be achieved through the completion of our DFS at Taronga and the delivery of updated resources for each project in 2023. We have already gathered a significant amount of data from both, and with no red flags having emerged to date, we remain optimistic for the future.
Our macro view of the tin market remains bullish with tin spot prices having risen in recent years, with record highs in March 2022 of US$49,000 per tonne. It is clear that the demand for tin will remain strong in the years ahead as the metal continues to be an important component for soldering electronics including semiconductors, solar panels, electronic systems in electric vehicles (EVs) and batteries. These significant drivers, together with a rapid increase in battery production and the rise of big data, are expected to create a material tin deficit from 2025 and we are confident that First Tin remains well positioned to take advantage of this opportunity and become a material tin supplier from its conflict-free and low political risk jurisdictions.
We have the right strategy and business model to unlock the significant value potential of our tin assets and pursue our purpose to develop a sustainable tin mining company to generate a long-term value for all our stakeholders.
Mr. T Buenger
Chief Executive Officer
