Good morning and welcome to the First Tin Plc investor presentation. Throughout this recorded presentation, investors will be in a listen only mode. Questions are encouraged and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Bill Scotting, CEO. Good morning, sir.
Thank you, Lily, and good morning and welcome everyone. Once again, I'm joined by Tony Truelove, our Chief Geologist and Chief Technical Officer. Tony's sitting in Brisbane in Australia. Good evening to you, Tony. The usual disclaimer here on page one, which I draw your attention to. This is why we're here today. This morning, we published the results of our definitive feasibility study for our Taronga project in Australia. The study confirms that Taronga will be a highly attractive, low CapEx, high margin mine to supply much needed tin units to a changing world. Taronga is a truly unique resource, and its value derives from the natural endowments of geology, mineralogy and geography, which produce risk, CapEx and OpEx. The geology has provided us with a very large resource base of 138,000 tons.
We have reserves which have increased to 52,000 tons in a simple, coarse grained ore body. It is amenable to low cost, low risk, bulk open pit mining with a low strip ratio and easy grade control. It is one of the few new open pit mines available. The mineralogy has the tin as a coarse grain cassiterite in narrow quartz veins within a harder hornfels base rock. You can see these in the photo in the top middle. Natural fracturing along the quartz veins, as shown in the photo bottom middle, makes blasting straightforward, reducing mining cost. This same fracturing, coupled with the coarse nature of the cassiterite, enables rapid liberation, volume reduction and grade enhancement with only basic crushing and gravity separation processes. Most importantly, this can be done by a low tech, low CapEx and low cost processing facility.
Turning to geography, Taronga is located in a historic tin district in northern New South Wales, which lowers permitting risk, lowers CapEx and lowers OpEx. The topography, as a couple of the photos show, allows a relatively small footprint and the layout makes use of contours which reduces CapEx and OpEx. These natural endowments make for highly attractive value creation. Starting at the bottom left on this page, AUD 143 million is the pre-tax NPV from the DFS study. Most important to recognize that this was done at a very conservative tin price of $26,000. However, since we settled on that price as the basis for the DFS, we've seen the jump in tin prices as the reality of constrained global tin supply and low inventory becomes apparent.
With spot prices around $33,000 per ton, our DFS number represents a very conservative base, even a low case today. If I adjust for a more representative tin price of $30,000, which is still 10% below spot, we add AUD 100 million to the NPV, bringing us to AUD 243 million. The pit optimizations were based on the conservative $26,000 tin price. When taking a higher price, you have the potential for a deeper pit and a longer mine life. A preliminary assessment indicates that we could add around three years to the mine life, which is worth around $52 million. In addition, the original pit optimizations and detailed design were done at a very conservative recovery factor.
Adjusting for the more recent higher recoveries achieved gives another circa AUD 25 million uplift to the NPV. These couple of increases are based on work that's already been done, so we consider them low hanging fruit. This brings us to what we consider an optimized NPV of AUD 320 million at a still conservative $30,000 tin price. Now we come to further upside. With some infill and extension drilling to follow the recent soil sampling work, we would expect to convert more inferred resources and open up adjacent zones to the two pits. This would extend mine life by another three years to 15 years and give an NPV uplift of another AUD 40 million. Finally, the project is very leveraged to higher tin prices.
For example, a $40,000 US dollar tin price adds another near AUD 260 million to the NPV to give an upside potential of AUD 620 million with some pretty basic assumptions. Beyond this, there is further identified opportunity from brownfield expansions, from satellite deposits and adding a fine tin flotation circuit. Also, down the road to look at the sulfide tailings to potentially recover copper and silver. A very competitive cost base coming from the simple open pit mining and processing translates to a high margin as you can see here. At current spot price, the cash margin from all-in sustaining costs is 52%. Even at the conservative DFS price, we have a margin of 40%. With that, I'll hand over to Tony now to take you through the next few slides. Tony.
Yeah. Thanks, Bill. As Bill already mentioned, Taronga's unique natural advantage of geology, mineralogy, and geography result in a significantly lower CapEx than you would otherwise think. The pie chart that you can see shows the breakdown of the CapEx, which is AUD 176 million or about $160 million. Infrastructure, processing, and energy are the major factors as in most deposits, and they account for about 70% of the CapEx. The infrastructure costs have been reduced by the location as we don't have to spend much at all to access markets. The site contours have helped with layout and design of dams and waste rock dumps. On-site bore water is close to the processing facility, which reduces costs for pipes and pumps. The coarse mineralogy allows a low-tech processing facility.
Simple crushing and gravity separation with a small footprint. If you can see that in the photo on the bottom left, which is an actual 3D model of the actual plant. The more expensive back end of sulfide flotation and dressing is therefore very small, less than 50,000 tons per annum, which also reduces the cost for lining what is a very small tailings storage facility. As the site requirements are pretty basic, we'll also save CapEx by doing self-perform on the mining preparation. The one area we are investing in is a solar farm and gas powered engine facility. That has an upfront CapEx of AUD 28 million, roughly 16% of the CapEx. However, we get payback through lower OpEx and reduce our carbon dioxide emissions by around 15,000 tons per annum. We've got a simple open pit mine.
It's a 1-to-1 strip ratio and basic processing plant. That not only translates into lower CapEx but also reduces the time to build and get into operation. As shown here, we believe a two-year build period is all that is required. CapEx spend ramps up in year two as the bigger sums for the processing plant and energy come through. We already mentioned the simple open pit mining, which together with the geology makes for very low mining costs. The schematic on the bottom left and the first photo show how the ore outcrops at the surface, which gives low stripping ratio and a strip ratio of around about 1 -to- 1.
That means that the peak movement, we move 10 million tons of material a year and get 5 million tons of ore to the front of the crusher by doing that. The mining fleet reflects a conventional truck and excavator operation with a 140-ton primary excavator, a 90-ton secondary excavator, 90-ton haul trucks, and a front end loader for the ROM pad. Mineralogy and processing. As mentioned earlier, the mineralization is unique in that the tin occurs almost entirely in the form of relatively coarse cassiterite in sheeted quartz veins within a hornfels host rock. The photos along the bottom show this. The veins have a lower rock strength than the host rock, resulting in preferential breakage along the veins during crushing.
That's shown quite clearly in the middle photo, where you can see the coarse cassiterite on the vein that's broken along the vein at surface. These unique characteristics result in 80%-90% of the tin being liberated at relatively coarse cassiterite during the crushing process. Crushing reduces the volume by around half with an 85% recovery and upgrades the crushed ore by between 150% and 200%, i.e. from about 0.13% to about 0.2% tin. The coarse nature of the cassiterite then allows very rapid reduction in volume and increasing grade of the concentrate through the gravity separation and grinding processes. These processes is simple jigs and spirals with screen cyclones, ball mill, and table cleanup. All basic kit, which is low on CapEx and inexpensive to run.
You can see here that these basic concentration processes reduce the volume by 99%, leaving a pre-concentrate of around 30,000 tons upgraded to around 15% tin. The final sulfide float and dressing is therefore relatively small and upgrades the pre-concentrate into roughly 6,000 tons of 60% tin concentrate. The basic mining and processing operations lead to low costs as shown on the right-hand table. You can see there that mining, processing, and G&A costs are around about AUD 14 per ton. That re-equates to around about $12,000 per ton of tin produced. The operation requires less than 150 people. Reagent costs are low as the final sulfide cleanup is small. Maintenance costs are low as basic equipment is basic.
The solar power more than halves our energy costs compared to the grid. The pie chart shows the split of OpEx over the life of mine. As you can see on the right-hand side, these cash costs place us towards the lower end of tin producers and give a healthy 63% margin at current spot. Back to you, Bill.
Thanks very much, Tony. So as Tony mentioned, we've got a very low-cost operation. Combine that with low CapEx, and we have a full cost of $19,300 per ton. This chart here is courtesy of the ITA and shows the projected full cost curve for 2027 based on 2022 data. As you can see, we're well in the low half for full costs. If we were to amortize the CapEx over a longer life of mine, as I described earlier, we would be even lower on this full cost curve. Just a few competitor comparisons on the right-hand side, and you can see we are close to reported lowest quartile for all-in sustaining and cash costs. Final point, as the chart on the left shows, the cost curve is going to get steep as marginal and new capacity come into play.
The ITA show the full cost for the 90th percentile player as $33,500 per ton, which is well above our cost. At our lower costs, the cash generation will be strong. Here you can see the potential benefit of that low cost and steeper cost curve. Our NPV is highly leveraged to rising prices. Our low cost provides a low breakeven price of $20,500. That, interestingly, is 10% lower than the average tin price over the last 10 years, so it's extremely unlikely to happen. The conservative basis of the DFS is shown here as well. Spot prices are already reflecting the ITA forecast inducement price for 2027, and you see that in the middle of the chart.
Let's not forget that when structural demand increase happens and supply can't keep up, prices go past the inducement price level and fly up as we already saw in 2022. I hand back to Tony for a brief update on the upside.
Thanks again, Bill. There are a couple of factors that will support a longer mine life. First, at a higher price, you have the potential to convert more inferred resources into measured and indicated by more detailed drilling. This then leads to a redesign of the pit shell to provide a deeper pit and a wider pit. The second opportunity to extend mine life even further, potentially out to 15 years, comes from extensions around the mine. Success from any subsequent follow-up drilling to the recently announced soil sampling could result in the identification of new mineral resources, which may significantly add to the mine life and the project economics. There are several areas identified, which you can see in the graphic on the top left. Firstly, potential parallel zones immediately north of the current pits.
There's very limited drilling into those areas, but we do know that there is tin mineralization there. Extensions to the northwest, northeast, and southwest. You can see the anomaly extends well beyond the current pit outlines. In between the two pits where we had one recent drill hole that returned significant mineralization in an area that was previously thought to be dead. There's potential parallel zones to the south of the current pits. Our geos recently went looking in those soil anomalies and actually identified outcropping tin mineralization at surface. If you note the outcropping rock broken along a fracture in that lower photo, it exposing the black cassiterite that you can see there is quite coarse.
You can see the leaves in the background there showing that it's actually outcropping at surface. Okay, pit optimizations and the subsequent detailed design are based on an early recovery formula that has now been shown to be far too conservative. We announced last week that ongoing mineral processing test work has shown a total recovery of 60.2% for a low-grade sample. Crushing test work on a high-grade sample provided 91% recovery to the fines, which is significantly higher than what we've had before. If the gravity concentrate recoveries from that sample are similar to what we've had for the other samples, our recovery at that grade should be around 65%-66%. That graph you can see on the bottom left there will actually rise up significantly.
These results arrived too late to redesign the pits waste rock emplacements, co-disposal areas and tailings storage facility for the DFS. However, revised pit optimizations that we didn't use in the DFS suggest that at currently achieved recoveries of about 59%, the mine life pre-tax NPV of the project are likely to increase from that we've provided in the DFS. At a later stage, we also plan to look at a fine tin flotation circuit, which should improve recoveries by another 5%-10%. Apart from Taronga itself, we have secured most of this broader tin district. Taronga lies within a historic tin mining area, which has produced over 89,000 tons of tin in concentrate.
The photos show old alluvial workings at the Tin Beetle Prospect, which you can see marked on the map there around about 7 km south of Taronga itself. The map shows many areas within 20 km of Taronga, which we hold exploration licenses over. Soil and rock sampling across there has shown potential similar to Taronga, which, if proven, would enable a longer-term hub-and-spoke system to be developed around the Taronga processing plant. The purple patches you can see there are +500 ppm soil anomalies, which is a similar order of magnitude to that that covers the Taronga ore body. Back to you again, Bill.
Thanks, Tony. The primary focus of today has been about Taronga, but let's not forget about Tellerhäuser. It's located in Southeast Germany in Saxony. Last week, we announced a significant update to the MRE, a 37% increase, which makes it one of the largest resources around at 338,000 tons. Different to Taronga, it will be an underground mine, but it's also polymetallic with some zinc, indium, magnetite, even some copper to offset the higher costs and complexity of underground mining. It is also part of a tin district, and we have exploration licenses for nearby Gottesberg, Reichenbrunn and Auersberg. Just a couple of pages on the macro to finish off. On the left-hand graph here, you can see the supply-demand forecast going forward.
With the growth in demand from solar, EVs, electronics in general, there's a broad consensus, I believe, that we're heading into a period of deficits for tin. This means that likely higher prices to induce new supply, as shown in the right-hand chart. Tin prices, the green line, have typically followed the 90th percentile on the cost curve. However, with the cost curve steepening as we saw earlier, prices will inevitably rise. Not only that, they'll have to move to a full cost basis and be subject to fly-ups until sufficient new capacity comes on stream. Given the time for new mines to be developed, that could be for some time yet. This issue arises as for various historic reasons there's very little new supply coming through. Here you can see a rather short list of new projects.
If all these happened over the next few years, which is probably unlikely on that time horizon, it only covers around 35% of the anticipated new demand forecast to 2030. You know, I checked various websites. I searched the media for updates. These are the best guesses that I can find on the timing of a number of these projects. What's clear, the world needs new tin projects. We have one of the best available ready to go forward now with the feasibility study completed. To conclude, First Tin's listed in London and Frankfurt. We've got 100% ownership of two exceptional projects in Australia, Taronga, and Germany, Tellerhäuser. Due to their locations, both in historic mining areas, both are close to existing infrastructure. We believe these are two low-risk projects. Both projects have established resources and reserves.
They've both got scale, and they're progressing through permitting and economic study. Taronga is the most advanced and is probably the most unique tin opportunity in the world. Simple, low cost, open pit mining and a mineralogy that allows a simple, low cost, gravity-based flow sheet. It'll have a low position on the cost curve and as the DFS shows, has very attractive economics with significant upside potential and leverage to higher tin prices. The outlook for tin is positive due to the structural shifts underway and the forecast deficits with tin increasingly recognized as a critical and strategic metal in many jurisdictions around the world. The genesis of First Tin 10 years ago with the founders was to get ready for the expected structural change that would come. And as this feasibility study shows, we are doing that. With that concludes the presentation. Thank you.
I believe we have some time for Q&A. I hand it back to you, Lily.
Bill, Tony, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab situated on the top right-hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. If I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.
Okay. Thank you, Lily. Just looking at the questions. There's one here from Pedro B. Thank you, Pedro. "The total CapEx is $116 million," correct. "How much of it will be financed by public subsidies?" Very nice. At this moment, it's not financed by public subsidies. Of course, in Australia we have some small amounts of funding coming through from the New South Wales government. It's not my expectation that this will be publicly financed. We'll go out looking for project financing, offtake agreements and the like, and the usual equity and debt. A combination there is how this will be ultimately financed. A follow-up question from Pedro. "Your estimation of total equity needed to finance the CapEx." Look, that's a good question.
It's probably too early for that sort of question. I think typically, you know, when you're doing debt financing, doing project financing, the providers always look for an equity proportion. Is that 30%, 40%, 50%? I don't know at this stage. We'll see down the road what the optimal balance of financing will be. Looking here. This one is one here from Ian. "What's your current cash position, cost of the planned infill extension drilling, and your high-level thoughts on funding?" Okay, the current cash position, we gave an update to the market last month. At the end of December last year, we had, from memory, $4 million available, which we're working our way through.
It's no secret that we will be going out for funding this year. It's been spoken about. Tony, do you just want to mention your thoughts on infill extension drilling, the cost for that?
Yeah, sure. Look, there's around about probably 7,000 or 8,000 meters of drilling that I think needs to be done around the pit. I think that will add a significant amount of new mineralization. For that, we're probably looking in the order of AUD 3 million-AUD 4 million. There's a fair bit of work going on on-site still. We're doing some regional exploration and we're basically looking at pre-construction of some of the roads and water dams ready for next summer. All of that combined, I think we'd be looking in the probably AUD 5 million-AUD 10 million range.
Yeah. Thanks, Tony. Yeah. I think the thing about the drilling as well and for the long-term drilling and the extension of the life of mine in the long term, the satellite deposits down the road, you'll be paying for some of that also out of cash flow as you go forward. Here we go. Another question's come in. Trevor, thank you very much. "Can you outline the remaining key permits required and reasonable timeline to receive those?" Tony, do you want to give an update on that?
Yeah, sure. There's quite a lot of permits that are required. At the moment, we are towards the end stages of our Environmental Impact Study. We plan to lodge that in the third quarter of this year. We're aiming for July. It may push out into August or September. Once that's lodged, the permitting process really starts. What we're expecting is that that will take somewhere between six and 12 months, depending on how much pushback we get from the local government, how many questions get asked and how much additional work we need to do. Look, there's a list of about 50 different permits that we need before we're actually in production. We're gradually working our way through all those.
As I've said, the majority of the questions will be answered by July. We're getting towards the end of a nearly two-year process that we've been going through on the environmental side, which is being done in parallel with the feasibility study work.
Yeah. Thanks very much, Tony. Look, operator, there's no more questions coming through. Therefore, I'd like to-
Bill.
Yep.
Bill, Tony, thank you for answering.
Yeah
All those questions that you can from investors, and of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Bill, could I please just ask you for a few closing comments?
Yeah. Thank you very much, Lily. Look, thank you everyone for listening. We very happy to have presented this definitive feasibility study. There's been a tremendous amount of work over the last two years to deliver it. We believe Taronga is a truly unique asset. Its geology, mineralogy is what differentiate it, and that enables a very low cost operation, low CapEx, and we believe very attractive returns, with a lot of upside potential from both tin price, which we're constructive on, but also from various opportunities to extend the life of this project into the future. Thank you for your participation. We'll sign off now. Thank you, Lily.
Bill, Tony, thanks for updating investors today. Can I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of First Tin Plc, we'd like to thank you for attending today's presentation, and good morning to you all.