Stellar Resources Ltd (ASX:SRZ) is well positioned to leverage a rapidly heating global tin market, targeting the second half of 2023 for a pre-feasibility study (PFS) for the Heemskirk Tin Project, the largest undeveloped tin project in Australia and among the five largest by contained tin in the world.
This quarter, the company recorded its fifth-best tin intercept yet at the Severn deposit, striking 15.9 metres at 1.27% tin within a larger intersection of 42.9 metres at 0.77% tin from 490 metres of depth.
On April 17, London Metal Exchange (LME) tin prices jumped by 11% to hit a two-month high of US$27,225 per tonne, driven higher by a suspension on tin mining to begin in August in Myanmar’s Wa State, which produces about 10% of the world’s global tin supply.
Burgeoning tin market
Tin’s core uses are for tin plate, chemical production, and as a solder material in the electronics industry.
Although not considered a battery metal by most, the mineral is vital to the rechargeable battery industry, representing the main solder material throughout the manufacturing process.
In fact, tin is expected to be the mineral best placed to take advantage of demand created by emerging technology like electric vehicles and alternative energy technologies, with considerably more to gain than even lithium.
Impact of new technologies on mineral demand.
Myanmar’s decision to pause tin mining in the Wa State is likely to have an oversized impact on Chinese tin production, as the country sources almost two-thirds of its tin concentrate from Myanmar, 70% of which is estimated to originate in Wa State.
The Wa State Central Economic Planning Commission has stated the suspension of mining will allow for the implementation of formal mining in the region.
A document released by the Planning Commission on April 15 stated, “in order to protect the remaining mineral resources in Wa State in a timely manner, all mining and excavation of mineral resources are suspended until mature mining conditions are in place”.
The tin market was in a five-year running deficit even before Myanmar’s announcement, with global stocks at very low levels.
Combined LME and Shanghai Futures Exchange (SHFE) stockpiles represent less than two weeks of global demand and almost all the world’s tin stocks have now moved to China.
At least 50,000 tonnes per annum more tin is needed for the technology surge to 2030, according to the International Tin Association (ITA).
Heemskirk Tin Project
Stellar’s Heemskirk Tin Project is particularly well placed to step into this potential void as a high-grade resource, given many existing tin mines globally now have lower grades and diminishing resources, and exploration and investment in new tin projects has been limited.
Global tin deposits by grade and size (in million tonnes).
Heemskirk is well advanced, with a scoping study in the bag and most of the project work, including metallurgical test work, engineering, development approvals and environmental studies, already completed to PFS levels.
Location of Stellar’s Tin Projects – West Coast of Tasmania.
The company’s most recent drilling produced solid results, extending mineralisation at the Severn deposit to 300 metres down dip and 150 metres along strike.
This latest drilling program was designed to increase the Severn mineral resource estimate (MRE) and grow the overall Heemskirk MRE, which currently sits at 7.6 million tonnes at 1.1% zinc for 81,976 tonnes of contained zinc.
SRZ expects to provide an updated MRE for the project sometime in the middle of this year, after a Phase 2B drilling program is complete and resulting assays have been received.
The updated MRE and additional drilling data will also support Heemskirk’s PFS, an important step toward production among growing global demand for tin.