Metals X has announced the results of a very positive quarter at its half-owned Renison mine.
In the mine, both production and the grade of the ore improved compared to the first quarter of 2021. 206,192 tonnes of ore was mined in Q2, up by 32,252 tonnes (19%). Grades rose to 1.39% Sn, up from 1.10% Sn. However, Metals X believes that production could have been even higher if it were not for the unplanned failure of the No. 4 Ventilation Fan. This restricted access to the higher-grade Area 5 orebodies.
In the processing plant, the higher tin grade resulted in greater recovery. Metals X also pointed to continued metallurgical improvements that have been made. Overall, 2,136 tonnes of tin was produced during the second quarter, up some 44% quarter-on-quarter.
On the balance sheet, things also improved. Although costs were higher during the June quarter, so was the amount of tin sold – and the tin price. All in-costs, which include mining and corporate costs, rose some AU$ 4 million to AU$ 50.04 million. However, imputed revenue also rose some 67% to exceed AU$ 78 million, resulting in a 4,206% increase in imputed net cashflow – up to AU$ 27.99 million in Q2.
During the quarter, significant progress was made on the Metallurgical Improvement Program. Installation of the replacement fine gravity spirals and improvements to the sulfide flotation feed pump stability were completed, with commissioning scheduled for Q3 and Q4 of 2021, respectively. So far, the program has reduced risks associated with aging equipment while increasing tin production capacity to around 880 tonnes per month.
Our view: Despite the challenges presented during the quarter, Metals X has done remarkably well. Sales of tin rose despite one of the company’s primary offtakers – Malaysia Smelting Corporation – being offline. Swift changes to the supply chains prevented any significant impact, with more tin now going to China and Thailand.
Higher production could be expected during Q3 as access to the high-grade Area 5 will likely be restored. Tin prices are likely to remain relatively strong during the third quarter, resulting in a continued strong financial performance.
