Stellar studies spur Heemskirk

In the February 2016 edition of Paydirt, Rhys Dickson reports that “Stellar Resources Ltd bucked the Tasmanian junior mining trend in 2015, steadfastly advancing its Heemskirk tin project.” He went on to say that “while a majority of its compatriots withdrew in the hope of better days to come, Stellar initiated a string of studies in a bid to increase Heemskirk’s appeal and to ultimately woo a JV partner for the project.”

The study of micro-structures in drill core by Teale and Associates combined with a report by IAMM Consulting on seismic data compiled by a previous explorer “not only confirmed Stellar’s suspicions that Heemskirk’s mineralisation persisted at depth, but provided the company a focus for resource drilling and future exploration.”

Rhys Dickson went on to say that “The last report to come across managing director Peter Blight’s desk in 2015 was by far the best” A PFS optimisation study bolstered Heemskirk’s NPV by 62% to $99 million, reduced its pre-production capital cost by 12.9% to $110 million and slashed its operating costs by 8.2% to $21,355/t tin.

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Stellar has added significant value to Heemskirk via multiple studies over the past two years”

Managing director Peter Blight was quoted in the article saying “we still think there are opportunities to sharpen the pencil when we get into the DFS. There is quite a bit to look forward to once we get the DFS process going.

 

 

 

Tin Exports From Biggest Shipper to Shrink as Smelter Shut

PT Refined Bangka Tin, Indonesia’s second-biggest smelter, has ceased operations in support of the government’s commitment to preserve the environment, and its facilities on Bangka island will become a conservation area. The move will cut exports by about 14 percent, an industry group said.

The company “has decided to close its tin refining and marketing operations for a commitment to preserve the environment and to support Indonesia’s government and President’s commitment” to the United Nations Framework Convention on Climate Change, according to a statement Tuesday from Tomy Winata, chairman of Artha Graha Network, which owns PT Refined Bangka Tin.

Artha Graha Network “wants to ensure that all business lines support the environment, including green-mining practices, and we see that our mining operations are currently far from meeting the group standard,” the smelter’s Chief Executive Officer Petrus Tjandra said by phone from Jakarta Tuesday.

The closure is the latest blow to the country’s tin industry, the world’s biggest exporter. The government has imposed curbs on production and overseas sales, tightened up on taxation and quality standards, and obliged exporters to trade the metal on a local exchange before shipping. Monsoon rains and floods have also disrupted mining and ore supplies.

Prices of tin, used in everything from electronics to packaging, have jumped 8.9 percent this year to $15,850 a metric ton on the London Metal Exchange. The metal has advanced 19 percent from the closing low on Jan. 15, just short of 20 percent which is the common definition of a bull market.
Banks to Plantations

Artha Graha Network is a conglomerate with businesses ranging from banks to plantations and mining. Refined Bangka Tin is a private company established in 2007, and has the capacity to produce 2,000 tons of refined tin a month, according to a statement on its website. Bambang Gatot Ariyono, director general of coal and minerals at Energy and Mineral Resources Ministry, said by phone that he hasn’t received a report on the closure.

The shuttering could reduce exports from Indonesia by at least 10,000 tons this year, Jabin Sufianto, chairman of the Association of Indonesian Tin Exporters, said by phone. He said the estimate was based on Refined Bangka’s past performance and its business plan. The country shipped 70,155 tons in 2015, the smallest amount since at least 2008.

The possibility of other smelters filling the shortfall will depend on their business plans and approval from the Bangka mining office, he said.

Environmental concerns have also affected the nation’s biggest tin smelter, PT Timah, which halted offshore mining last month in response to complaints from local fishermen.
Shipments Slide

Two other smelters, PT Stanindo Inti Perkasa, and PT DS Jaya Abadi, are producing at below 70 percent of capacity due to a halving in ore supplies, M.B. Gunawan, a director at Stanindo and general manager at Jaya Abadi, said by phone on Monday. At issue are government rules imposed in November that require ore to originate from licensed mines.

Both companies are “currently only exporting about 100 tons per month,” Gunawan said. The smelters expect to raise output to about 80 percent capacity by mid-year, he added.

Tin exports have dropped every year since 2013 due to stricter regulations. Shipments dropped 7.6 percent in 2015 from a year earlier, according to Trade Ministry data compiled by Bloomberg. Overseas sales plunged 57 percent to 2,486 tons last month from December, the data showed.

 

Source: www.bloomberg.com

Morgan Stanley – Metal & Rock – Tin’s supply grief to continue

A catalogue of supply-side dramas has tightened the global tin market, leaving global inventories critically low + lifting the price.

Top price performer: Of the base metals, lesser-known tin has already delivered a solid price performance in 2016: +7.3% ytd to $15,651/t (in line with zinc; outstripping complex’s heavy-weights copper & aluminium) on robust market fundamentals. So what’s actually going on in Tin World – a metal used mainly as a solder (pipe joining/welding; electrical), making it a good gauge of industrial and property sector activity?

Mostly a supply story: A massive drawdown in LME inventories this year gives a hint about tin’s main price driver – down 26% ytd to just 4,500t (4.5 days’ supply) – itself a function of declining supply out of Indonesia and China (>60% global supply), in the face of stable demand growth. Indonesia’s exports fell 63% yoy Jan-16 (2,486t), mainly after a new export permit procedure was implemented mid-2015 (gives producers 6-month export quota). As producers filled their quota quickly, they had nothing left for January! While these exports should recover once the permits are renewed, there are supply constraints elsewhere: Indonesia’s main tin-producing province of Bangka Belitung was flooded late-Jan; environmental constraints have been imposed on offshore mining; a clampdown on illegal mining is being extended. Meanwhile, China’s tin producers announced coordinated supply cuts in Jan-16, totaling 17kt (12% of China’s 2015 production; 5% global output). Refined production may also decline in 2016 on reduced ore supply from Myanmar. Rapid growth of Myanmar’s tin industry (17kt, 2015; up from 2kt in 2012) undermined tin’s price mid-2015; but grades are peaking and current production rates are believed to be unsustainable.

Bullish price outlook: China’s producers are lobbying the government for the development of a tin stockpile as a way of providing industry relief for subdued domestic demand – in particular, in China’s construction sector. Nonetheless, falling mine supply and modest demand growth are expected to leave the global market in deficit in 2016, supporting the price. We forecast $16,755/t in 2016 (+4% yoy).

 

Download the complete report (33 pgs)

Source: Morgan Stanley

Minsur’s Peruvian production falls in December

Latest data released by Peru’s Energy and Mines Ministry has revealed that tin production by Minsur’s San Rafael mine, the country’s only tin operation, dropped in December 2015 by nearly 23% to 1,841 mt. According to the ministry, provisional tin output from San Rafael fell 15.6% to 19,511t in 2015 from the year before.

ITRI View: The reduced production is not surprising and is primarily a result of the continuing natural decline in tin grades at the mine. Official production data for 2015 will be released by Minsur in due course.

 

Source: ITRI – www.itri.co.uk

Regulation and flooding curb Indonesian tin operations

Preliminary data from the Indonesian trade ministry has revealed that the country exported 2,486 tonnes of tin in January, down 63% from the 6,770 tonnes exported in January last year, while recent flooding on the island of Bangka is expected to affect tin operations in February.

There are three inter-related regulatory factors currently affecting sales, two of which are new. The first factor is that producers need permission to export (PE) letters, which give them a maximum permissible tonnage they can ship over six months. Some producers used up their initial six months quotas early, so had to stop selling in January prior to renewal of the PE from 1 February onwards.

Additionally, the two new factors are that the provincial government of Bangka Belitung has halted offshore mining activities since 27 January, while new audits of smelters in the province are due to be carried out this week and next by inspectors from the energy and mineral resources ministry.

Bloomberg also reported that flooding on Bangka has restricted access to smelters and mining areas and caused electricity cuts on the island. PT Timah has announced that its Nudur mining area on Bangka has shut due to flooding, although its other mining leases and smelting operations remain unaffected.

 

Source: ITRI – www.itri.co.uk