Kasbah Resources has announced a small capital raising, but will wait for tin prices to recover to over $18,000/tonne before finalising debt financing arrangements for its Achmmach project in Morocco.
The company is to raise Au$3.0 million by issuing 104.6 new shares, with existing shareholders Africa Lion Fund, Thaisarco and Traxys all increasing their equity stakes in the company. This will cover continuing small-scale pre-development work on site and substantially reduced corporate costs.
In a statement the company noted that an enhanced definitive feasibility study released in March showed that the planned 5,850 tpy capacity operation had projected full (C3) production costs of US$13,296/tonne. “Despite the tin price touching a 6 year low, the enhanced economics generated strong indicative offers of debt from several European banks and development agencies. However, the Board is cognisant that an anticipated strengthening of the tin price would likely result in additional and more competitive financing terms for the Achmmach Tin Project. An improvement towards an average LME tin price of circa US$ 18,000/tonne would provide Kasbah confidence to mandate commercial lenders to complete their due diligence and provide unconditional debt offerings. As such and whilst the tin price is being re-set, Kasbah‘s Board has resolved to continue to advance Achmmach to a ‘development ready’ status and to defer a financing decision until this sustained upward trend in tin price has been achieved.”
ITRI View: Achmmach is the most well-known advanced stage large-scale tin mine project worldwide, so its progress towards financing, construction and start-up is a key indicator of the state of the industry. Currently the global tin project pipeline is almost completely stalled, with most projects requiring sustained prices significantly greater than $18,000/t to go ahead.