Page 14 - pd249 May17 mag-web

NEWS
Well timed split for Metals X
Metals X Ltd chose a good time
to demerge its gold assets into
Westgold Resources Ltd late last
year.
Australian gold prices have fa-
voured local players for several
years and with Westgold led by
gold industry legend Peter Cook,
the company was always going to
be well supported in the market.
So far, Westgold – a top 10 gold
producer in Australia – has been
appreciated on the ASX, trading at
$2.30/share at the time of print, af-
ter starting on the bourse at about
$1.70.
Metals X has also held its own,
improving trading from 56c/share
at the start of this year to 75c/share
in mid-April.
“Copper prices started to move
in November, so it was good timing
to split around December and both
stocks have gone quite well since
that time,” Metals X managing di-
rector Warren Hallam told Paydirt.
Metals X acquired the Nifty cop-
per operation in Western Australia
in 2016 and was therefore happy to see
the red metal rally and hold its ground
since the start of the year, reaching
$US2.60/lb last month.
Production from Nifty has been run-
ning at about 27,000-30,000 tpa, how-
ever, early analysis of the geology has
Metals X confident it can announce a
reasonably significant reserve increase
later this month.
“We have also got an underground rig
drilling about 80-100m per day at the mo-
ment and a lot of that drilling will come
into another reserve upgrade towards
the end of the year,” Hallam said.
Over a period of 10 years, about 600m
of known mineralisation extending to
1.2km has been mined at Nifty, with Met-
als X setting up to drill down-plunge to
demonstrate the orebody is at least a
couple of kilometres long.
Hallam said the objective was to dou-
ble or triple current existing reserves
(5.24mt @ 1.85% copper for 97,000t) and
turn Nifty back into a long-life mine.
Additionally, the nearby Maroochydore
deposit – 486,000t copper and 19,000t
cobalt – is the most advanced of a num-
ber of regional prospects Metals X hopes
to capitalise on in WA’s East Pilbara re-
gion.
In the meantime, boosting production
to around 45,000-50,000 tpa copper in
PAGE 14 MAY 2017 AUSTRALIA’S PAYDIRT
The mine, on Tasmania’s west
coast, is delivering a cash margin of
$10,000/t on a tin price of $28,000/t
according to reports in late March.
With eight years of reserves and
16 years of resources, plus poten-
tial to add to that, the next step at
Renison – a 50/50 JV with Yunnan
Tin Group – is adding an ore sort-
ing, x-ray transmission component
to the production process, which
will add another 20% to production
capacity and reduce costs when
implemented at the end of the year.
The expansion at Renison can
be done with minimal capital, which
gives Metals X the opportunity to
act on the Rentails development if
studies compel the company to do
so.
“That [Rentails] project would be
delivering around $50 million cash
flow if it was up and running now,”
Hallam said.
“We are dotting I’s and crossing
T’s on feasibility and modelling,
Warren Hallam in preparation of starting to talk to
banks and in the next three or four
the next few years is the company’s am- months. We will start to make a decision
bition. on where to go with that at some point
“That is simply by opening up the this year there will definitely be a deci-
mine, getting the mining areas up, get- sion.”
ting the mine to deliver and maximising Rentails has been in the pipeline for
the throughput through the process plant some time and while there is much noise
[a 2.5 mtpa concentrator],” Hallam said. around lithium-ion batteries, most punt-
“Up to now, that process plant can only ers appear to have forgotten the impor-
run on a two weeks on/one week off ba- tance of tin and other elements that make
sis, so it is about filling that up.” up batteries. As a global top 10 primary
Current AISC at a production rate of tin producer, Metals X is keen to make
about 30,000 tpa is $US2.15/lb, with Met- them remember.
als X targeting AISC of $US1.75/lb within “There are not many analysts around
12-18 months. that understand the tin market at the mo-
“The underground [cost] is 80% fixed ment. I think it is a little bit of a black box
and the processing is about 50% fixed, for them. But, there is growing interest,
so really we have about 10% of the re- especially as batteries are coming more
duction costs still to go in just doing and more to the forefront,” Hallam said.
things different and better, but the rest is “We all know that even though they
going to be volume-driven,” Hallam said might be called lithium batteries, they
“We have at least a five-year plan on use lots of other stuff in them. Also,
the table now, so we are busily working 25,000t out of the 355,000t of annual [tin]
that into detail so we can scrape out a demand is going into lead acid batteries
reserve. Everything is there and lined up and that market itself has grown. Obvi-
to do that.” ously, lithium-ion batteries have another
Nifty was only acquired via an off- formula but certainly tin is in all those
market takeover in September last year electronics and there is a lot more inter-
but Metals X is starting to get a handle est in the market, particularly with where
on operations with a new management electric cars are going.”
team coming together. – Mark Andrews
The company can nurture the newest
of its assets knowing that the Renison tin
mine in Tasmania is “working very well”.