The Renison joint venture in Tasmania
Australia's largest tin producer, Metals X, on Wednesday published results of its Area 5 mining optimisation study and an updated mine plan for the Renison tin operation, in Tasmania.
Renison is 50% owned by Metals X through the Bluestone Mines Tasmania joint venture (JV).
The study was commissioned in August 2019 to determine the optimal development strategy for Area 5, as a starting point for the Renison project.
The study determined that Renison now has a 3.3-million tonnes ore reserve grading 1.87% tin, for 61 900 t of contained tin in area 5. The total Renison ore reserve has increased by 46% to 120 300 t of contained tin.
The mine life of the Renison project has been extended to ten years.
Production from the high-grade Area 5 will contribute 40% of total contained tin mined over the ten-year mine life.
The company intends to mine between 8 500 t/y and 9 000 t/y of tin in the first two years of operation, followed by mining 10 000 t/y thereafter.
Metals X estimates that it can produce a total 98 000 t of tin in concentrate over the mine life.
Area 5 requires about $50-million in capital expenditure, for ventilation, backfill, electrical and pumping infrastructure, as well as additional mobile equipment.
At a modelled tin price of between A$23 500/t and A$24 500/t, and all-in sustaining costs of about $20 000/t in the first two years and about $17 000/t from the third year, the project can generate a cash flow of $300-million.
Earnings before interest, taxes, depreciation and amortisation are expected to be about $476-million a year.
The project has a net present value of $185-million, assuming a current spot price for tin of A$24 800/t.
CEO Mike Spreadborough said Area 5 was an "outstanding" addition to the already substantial ore reserves at Renison. With a mine life of ten years, of which 82% of the project has proven and probable ore reserve status, Renison is well set to deliver substantial returns to the company over coming years.
The company is now focusing on detailed mine design, engineering and execution planning for the Area 5 project, as well as continued metallurgical and margin improvement.