Elementos Ltd (ASX:ELT) (OTCMKTS:ELTLF) (FRA:9EM) is taking big steps to capitalise on strong tin market fundamentals, including high prices, through exploration, development and production of high-grade tin projects in stable jurisdictions.
The company’s portfolio comprises near-term development and exploration assets, including the Oropesa Project in Spain, one of the world’s largest undeveloped, open-cut mineable tin deposits.
Another asset is the Cleveland Project in Tasmania, a large resource of tin-copper amenable to open cut and underground mining techniques.
Following the completion of an economic study for Oropesa, the company has been seeking to further optimise potential financial returns.
The company believes that Oropesa represents an opportunity to create a value-uplift potential as the project is advanced towards development.
The company’s efforts to rapidly advance Oropesa have been bolstered by a surge in prices, which enhance project economics.
Tin prices have been consistently improving over the last 12 months, rising more than 28%, and reached a 10-year high on April 19, 2021, at the London Metal Exchange (LME).
Currently, the prices are hovering around US$27,000 per tonne.
According to industry insiders, tight global supplies, particularly of refined tin, are struggling to match an increase in demand.
This is driven by increased use in downstream markets particularly from auto component makers, electronics and renewable energy industry and battery manufacturers.
Supply shortages are also due to falling production from some prominent mining districts, exacerbated by congestion and delays resulting from the impact of COVID-19 on international logistic systems.
Drilling at Oropesa project
Oropesa is the flagship and a diamond drilling (DD) exploration program that started in the December quarter of 2020 is continuing.
The company plans to drill 48 diamond holes for a total of about 5,000 metres with 31 holes completed to date for a total of 3,710 metres and assays received for 19 of the completed holes.
This program follows the release of the Oropesa Economic Study, which positioned the project as a low-cost, globally significant new tin development with a prospective annual production of 2,440 tonnes of tin-in-concentrate over a 14-year mine life.
The economic study was completed with a tin price of US$$19,750 per tonne.
Objective of drilling
Elementos’ principal objective for the drilling is to increase the confidence of previously reported inferred resources, to the indicated classification and to confirm near-surface, possibly fault-controlled mineralisation that is not included in the 2017 mineral resource estimate.
Besides this, the company is testing for additional near-surface mineralisation from exploration targets outside the estimate and identified from historic Induced Polarisation (IP) geophysical survey anomalies.
It is also aiming for a new mineral resource estimate which is planned to form the basis of a wider mine planning and optimisation program.
This is intended to optimise the project’s annual production rate and mine life as well as to reduce the overall waste-to-ore stripping ratio.
This work will assist in preparations for a feasibility study and the company is confident that it will present an opportunity to extract more value from the project and minimise risks.
These additional studies will include advancing resubmission of the project’s environmental authority application and progressing engineering studies for the process plant and site infrastructure, including tailings dam design.
The company has engaged an experienced Spanish project management team, Soluciones, Concentradores Y Procesos de Ingeniería, SL, to oversee its activities at Oropesa.
Cleveland Tin Project
The Cleveland Tin Project is around 80 kilometres southwest of Burnie in the mineral-rich northwest region of Tasmania, Australia. It is a historic underground mine site boasting excellent power, water and transport infrastructure.
Exploration activities have restarted at the project following an easing of interstate travel restrictions imposed to curb the spread COVID-19.
A prospective target approximately 500 metres in length to the immediate northeast and along strike of the existing geological resource has been identified as been highly prospective for the potential to contain additional tin and copper resources.
The region contains a set of historic self-potential (SP) geophysical anomalies from a survey carried out by the Bureau of Mineral Resources (Geoscience Australia) in 1954 that have not historically been investigated in any known detail.
Reconnaissance mapping of the prospective region has confirmed the presence of the geological mine sequence with rock chip samples containing visible sulphide mineralisation at four of the five locations investigated.
A proposal to drill test the SP anomalies will be submitted to Mineral Resources Tasmania during the next reporting period.
Following the completion of a $6.1 million capital raising initiative, the company is well-funded to progress the development of its wholly-owned Oropesa Tin Project and to continue the exploration and assessment of the Cleveland Project.
Appointment of new CEO
Subsequent to the end of the March quarter, the company appointed a new chief executive officer in Joe David who has experience in project delivery, specifically with bankable feasibility studies.
The company’s board felt that amidst surging tin prices, a strong outlook for tin and with strong progress made on Oropesa, the timing is right to appoint a CEO with a strong mining and finance background.