According the company’s statement, the majority of the funds will go towards a drilling programme at the mine. Strongbow began work expanding the 2016 mineral resource by verifying and incorporating historical data. South Crofty operated for around 200 years, leaving a wealth of information on the existing mine workings. The new mineral resource estimate will also incorporate new drilling results.
At the time, the company estimated that it would need some £15 million to completely dewater the mine. The dewatering process, one-third of the total cost, will be completed in three stages expected to take up to 18 months. The proposed drill programme will take place during these 18 month. This information will then guide the future mine plan.
Our view: According to available data, South Crofty remains one of the most prospective tin mines in the world. The mine grade averages 1.55% Sn, almost 1% higher than the global average. Furthermore, forecast costs put the project in the lowest 40% of tin producers on a Full Cost* basis. An improved mineral resource should make Strongbow‘s flagship project even more attractive to investors.
*ITA Full Costs take into account mine operations costs, processing costs, logistics, administration, capital costs, and depreciation and amortisation. Full Costs do not include byproduct credits.