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Markets // Market Analysis

Renison output down in 2016

Monday, 13 February 2017

Metals X released its final quarterly report for 2016 in January, which reveals a 2.9% QOQ increase in tin-in-concentrate production to 1,768 tonnes from the Renison tin mine in Tasmania. However, the output for 2016 totalled 6,314 tonnes, down 7.4% from the previous year.

The company cited that the boost in Q4 production was a result of higher Australian dollar tin prices and lower cost profile after the transition to owner operator earlier this year. Meanwhile grades, recoveries and tonnes mined and processed remained similar to Q3. All-in-Costs of A$18,495 (~US$14,200) per tonne of tin-in-concentrate were reported for the quarter, lower than the $20,351 (~US$15,600) average for 2016 It was also stated that mine production remains in excess of processed tonnes and that an ore stockpile exceeding 30,000 tonnes has been accumulated.

A decision on whether to proceed with construction of a new ore sorting plant is due to be taken early this year. Trial work has indicated that 25% of waste can be discarded with tin losses of less than 3%. This would increase the plant head grade and mine production without the need for a processing plant expansion, for an estimated 15-20% expansion of tin production potential.

In addition, a 2017 feasibility study for the Rentails tailings project is due to be completed in early 2017 which will update the capital and operating cost estimates from the 2009 feasibility study. Preliminary analysis indicates that only a minor increase in capital (~2%) and operating costs (~15%) is expected, which would result in a strong business case for the project at prevailing tin prices.

ITRI View: The lower production in 2016 can be explained by the changeover from contract mining to owner operation, which impacted output in Q2. The tin content of the ore stockpile that has been built up at the site can be calculated at over 375 tonnes of tin, assuming tin content of 1.25%. We expect both factors to result in a recovery in tin concentrate production from the mine in 2017, with the two expansion projects providing longer term upside for output from the mine.

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