East Perth-based tin and nickel explorer Metals X Ltd, previously Bluestone Tin Ltd, will re-open its Renison project as a tin and copper producer, the company has announced.
East Perth-based tin and nickel explorer Metals X Ltd, previously Bluestone Tin Ltd, will re-open its Renison project as a tin and copper producer, the company has announced.
The full text of a company announcement is pasted below
After nearly 2 years on care and maintenance the Renison mine is set to re-open as a tin and copper producer.
Metals X Limited's ("Metals X or the Company") wholly owned subsidiary, Bluestone Mines Tasmania Pty Ltd has received its permit under the Lands Use Planning & Approvals Act 1993 for the development of the Mt Bischoff open pit and the Board of Metals X has approved the development plan for the expanded Renison Project to restart.
The Company will immediately set the wheels in motion for the re-start of the historical Renison and Mt Bischoff tin mines and Tin Concentrator Plant. Metals X will fund the project from existing cash reserves and is finalising a A$15 million debt facility with Credit Suisse (Singapore Branch) secured against the Group's royalty income assets only
to provide additional working capital for the Group's activities.
The Renison Project is a key component of Metals X's Tasmanian Tin Strategy which also aims to build an integrated downstream tin fumer project (the "Rentails Project") to both reprocess historic tailings as well as lower overall residues from the current Tin Concentrator Plant.
The Renison Project (excluding the fuming project) is expected to produce approximately 8,500 tonnes of tin metal per annum with a blended feedstock from both underground mining at Renison and open pit mining at Mt Bischoff.
Metals X (formerly Bluestone Tin Ltd) invested over $50m in capital to revive the Renison Project only to place it on care and maintenance in October 2005 as tin prices collapsed to under US$6,000 per tonne in response to an explosion in small scale illegal production in Indonesia. With the depletion of easily won ore and the reduction of Indonesian fuel subsidies and assertion of control over illegal practices, order has returned to the market. This along with the backdrop of very strong consumption growth, has caused world tin prices to recover to recent levels above US$16,000 per tonne and to have stabilised above US$14,000 for the last 6 months.
Metals X Managing Director, Peter Cook said "The world is short of tin and the metal faces long term supply pressure. Production costs of tin metal by unofficial/illegal sources have risen dramatically as most of the easy tin has been won. World consumption of tin has grown strongly in recent years driven mainly by the electronics industry demand for solders, particularly lead-free solder. We believe there is now a floor under the tin price that is significantly above long term average prices and this bodes well for sustainable tin production from the Renison Project."
The new operating plan for the Renison Project is based on predominantly owner-operated mining and in this regard a new fleet of Atlas Copco production equipment has been ordered and will arrive early in 2008. The site is planning to operate an even-time production roster (5 days on, 5 days off) and include the construction of a $6.5m, 100
person executive style single persons quarters to cater for the workforce and enable the project to attract skilled labour from all over Tasmania and south-east Australia.
Additional new technology will be incorporated into the process route on start up which is expected to have a positive impact on overall tin recoveries.
On re-start the Renison Project will, for the first time, enter the ranks of a copper producer with the metal being produced as a co-product with tin. It is well known that Renison ores have contained significant copper mineralisation but it has never been extracted and sold by previous owners. In the past the coincidence of copper with tin concentrates has been more of a nuisance than a benefit. However, with the significant increase in copper prices in recent years and an increasing copper grade with mine depth, it is now economically viable to extract the metal to a saleable concentrate product.
Significant intercepts of copper were received from drilling completed at the time of suspension of the operations in October 2005. These copper results are associated with tin mineralisation in both the Federal Deeps and North Basset/ King lode positions.
The copper mineralisation exists primarily as chalcopyrite and occurs in association with the tin. It therefore gets a "free ride" through mining and most of the processing and as a consequence, for very low operating costs, a copper concentrate co-product can be generated.
Metals X has estimated copper resources and reserves from the areas it intends to mine as tin lodes as follows:
It should also be noted that there appears to be a significant amount of copper mineralisation in other lodes and areas that have been historically mined. In particular, hanging-wall positions of skarn lodes appear to be particularly enriched in copper and in some instances may carry commercial grades of copper in their own right. Metals X is
planning to complete a full review of the entire Renison ore system with extraction of copper as the key object.
In the meantime, a copper circuit will operate to recover copper as a co-product that is mined as a consequence of mining tin lodes. At this stage the operating plan has only estimated copper mining reserves for the planned mining in the Federal Lode in the ensuing 2 years which alone justifies the operation of the copper circuit.
Annualised copper production will be quite variable due to distribution, however recoveries of 80% of the copper in feed is expected and a likely co-product profit of approximately $20 per tonne is estimated. Peter Cook said "This is a very welcomed and valuable addition to the viability of the Renison Project and it just represents the tip of the iceberg in terms of the copper potential at Renison."
It is likely that similar co-product revenue can also add to the profitability of the Rentails Project. The Rentails tailings re-treatment project is built around a strategy to recover tin by re-processing of 18.17 million tonnes of historic ore processing residues from the Renison mine. The tailings average 0.42% tin and 0.26% copper. Tin recoveries are estimated to be 55% and copper co-product can be recovered at this stage by tapping a copper matte from the furnace. Metals X is still determining the expected copper recoveries, but for guidance, if 25% recovery of the copper can be achieved, co-product profit of $10M per annum ($5/t) would be achieved.
Metals X expects the manning up and pre-production phases of the Renison Project will take 6-8 months to complete and it expects to resume tin production after commissioning of the process plant in mid 2008. Shortly thereafter the Company expects to be in a position to consider the development of its Rentails Project following
the completion of the definitive feasibility study.
In addition Metals X includes its updated and consolidated Identified Mineral Resource and Mining Reserves estimates for its Tin Division as an appendix to this announcement.
