Rusolovo recovered from a poor Q1 to equal second quarter results from last year.

Tin production of 712 tonnes, was in line with last year’s results and up some 31% quarter-on-quarter. However, Rusolovo mined significantly more ore, suggesting lower grades in the mine.

However, lower grades may not be a problem in the future. The company installed XRT ore sorting technology at its Pravourmiyskoe mine in February 2022, which should upgrade the crushed ore significantly before processing. In its recent investor day presentation, parent company Seligdar announced that an ore sorter will also be operational at Festivalnoye in October 2022, with construction underway.

Modernisation of the Solnechnaya processing plant at Festivalnoye is ongoing. The company plans to have the plant process 480,000 tonnes a year when the work is finalised. Ramp-up is planned for 2023.

Perhaps most interestingly, Seligdar announced the formation of a new subsidiary, AOK LLC, in May 2022. This new company will advance a project to build a tin smelter in Amur, Khabarovsk region. The smelter would be located close to the company’s existing mines and consumers in Asia. Plans are still at an early stage, with economics still to be confirmed.

Our view: Ore sorting is expected to increase recovery to at least 67% at the company’s processing plants, as well as improve concentrate grades. However, the technology won’t be present at Festivalnoye until Q4. With lower demand for refined tin at the moment, there will likely be less interest in taking tin concentrate from Rusolovo. As such, we do not see output increasing significantly in Q3, although a small seasonal uptick may be expected.