Chief Executive's Statement

 

First Tin's ambition is to become a leading global tin producer, supplying fully traceable and verifiable tin units to global industries which have a high requirement for tin. Our near-term strategy is to rapidly develop two advanced, high-value, low capex tin projects in Germany (Tellerhäuser) and Australia (Taronga), leveraging the strong regional infrastructure at each asset.

 

The past few months have not been without challenges in the macro environment, with Russia's invasion of Ukraine, volatility of stock exchanges, and the tin spot price sell off. Subsequently, this has impacted equity valuations almost universally.

 

However, despite all these challenges, we are pleased to report that during the last six months we became a public company by listing on the London Stock Exchange, raising in aggregate £20 million, and have been progressing our assets' development diligently. We remain confident about our prospects and those of the tin market generally.

This is because tin is a critical metal, vital for the decarbonisation and electrification of the world, yet Europe has very little supply. Rising demand, together with ongoing supply shortages, is expected to lead to sustained deficits for tin for the foreseeable future. First Tin's assets have been de-risked significantly, with extensive historical work undertaken to date.

 

German Assets - Tellerhäuser, Gottesberg and Auersberg

 

The assets are located in the Free State of Saxony in eastern Germany. The projects are all easily accessible. There are three international airports within 200km, the closest Dresden, at 55km. All weather road access is provided via the sealed road network in Saxony and the nearby rail system provides access to the European network for the importation of mining equipment and all required supplies for operations. It also provides a cost-effective method for transportation and for the export of products to the end users either within Germany, Europe, or via ports for shipping onto alternate destinations.

 

Tellerhäuser

 

The Tellerhäuser project forms part of the Rittersgrün license and is one of the world's most advanced tin deposits. The asset includes a former German Democratic Republic ("GDR") mine and has an exceptionally long history of mining. An active Mining Licence is already in place until 30 June 2070 for the extraction of mineral resources.

 

A Scoping Study, undertaken in 2021, showed that an operation producing 500,000 tonnes per annum over the life of the mine is financially robust. The report indicated a very low projected start-up capital expenditure of USD49 million, which, at USD30,000 per tonne of tin, suggests a Net Present Value ("NPV") of USD264 million (using an 8% discount rate) and an Internal Rate of Return ("IRR") of 58%.

 

In line with our commitment to "leave no trace" on the environment, we are planning on building the processing plant underground, while waste rock and processing waste will be used as a by-product for backfill. Our underground water treatment plant will also be situated underground, while we aim to secure the supply for our power needs by renewable energy generated in the region.

 

In June, we signed a non-binding Memorandum of Understanding ("MOU") with Ecobat Resources Freiberg GmbH ("ERF"), a market leader in the collection, recycling, production, and distribution of resources for battery systems. ERF has the potential to become an offtake partner to First Tin and the intention is to jointly establish a fully integrated 'mine to metal' value chain in Germany. Over the next 18 months, our German subsidiary will jointly develop and execute a concept study and a feasibility study relating to a metallurgical project from primary and secondary raw materials. Under the premise that the study demonstrates viability, both parties aim to conduct basic and detailed engineering in 2023. The potential partnership will contribute to reducing the pressure within Europe for this critical raw material during a global tin supply shortage.

 

Post period end, in August 2022, we commenced a fully funded programme of diamond drilling focused on adding high-grade tin mineralisation to the Indicated Resources already present at the project. This is an exciting progression for First Tin and a key workstream that will take approximately six months to complete, with first assay results expected during Q4 2022.

 

The drilling consists of five parent diamond drillholes, with each having up to five daughter holes. The daughter holes will be highly deviated from the centre parent hole, designed to intersect the deeper, high-grade Dreiberg tin mineralisation at a nominal 50m x 50m spacing around the parent holes. 

 

Dreiberg mineralisation was originally intersected by the German-Soviet Union drilling undertaken between the late 1960's and early 1980's and in total there have been 25 holes drilled into the structure, with the best historical results including 7.2m @ 2.15% tin ("Sn").

 

Dreiberg mineralisation sits approximately 3km down dip of Tellerhäuser's Hämmerlein tin mineralisation and is approximately 400m deeper due to the dip angle. The ultimate aim of this work is to convert as much of the high-grade Dreiberg tin mineralisation as possible, from Inferred to Indicated resource status and thus enable this to be used for economic evaluation under JORC guidelines. The drilling will also aim to identify additional extensions to the known Dreiberg tin mineralisation.

 

The drilling will also enable the collection of a new sample of the Dreiberg mineralisation for additional mineral processing test work. While the previous mineral processing test work suggests the mineral processing characteristics of this mineralisation are very similar to those at Hämmerlein, it will be very useful to confirm that with our own sample.

 

The DFS commenced at the Tellerhäuser project in August 2022 and is being undertaken by the well-respected German consulting company, DMT GmbH & Co. KG ("DMT"). DMT has worked extensively in Germany as well as in many other countries worldwide, including Canada, Sweden, Turkey and Kazakhstan. The study is expected to be completed by the second half of 2023.

 

Gottesberg

 

The Gottesberg project is a historical project of global significance, located just a few kilometers from the Tellerhäuser tin project in Saxony. Mineralisation from this area is intended to deliver additional ore for processing at a central processing facility. Since July, First Tin has been announcing drill results from this project area, which have confirmed a higher-grade section within the existing resource. The best intercepts to date have returned 73.3m at 0.49% Sn from a drill depth of 91.7m, 2.5m at 2.72% Sn from 128.2m, 6.95m at 1.46% Sn (and 0.26% Cu, 7.7g/t Ag) from 143.65m and 6.5m at 0.98% Sn from 124.7m. We look forward to announcing additional results in the coming weeks.

 

Auersberg

 

Auersberg is the largest tin in stream sediment anomaly in Saxony and adjoins Tellerhäuser and Gottesberg licenses, creating 237.8km² of continuous tenure for regional exploration. There have been numerous historical tin workings but practically no modern exploration. Multiple walk-up tin targets have been identified and First Tin is planning to undertake further exploration work on the license during 2022.

 

Australian Assets - Taronga Tin Project

The Taronga tin project is the 5th largest undeveloped tin reserve globally and the second-largest outside of Russia, Kazakhstan, and the Democratic Republic of Congo. It is located in New South Wales, Australia and includes a Mining Lease and four Exploration Licences.

 

The asset is a historic placer area and, in addition to the existing tin mineral resource, we believe that the primary rocks outside of the existing resource remain underexplored and we have identified six exploration targets with drilling to commence on the highest priority targets in September.

 

Taronga has near-term production potential and post period end, we commenced a DFS on the asset. The study is being delivered by a consortium of Australian companies led by Mincore Pty Ltd ("Mincore"), which will undertake the project management and mineral processing. The study is expected to be completed by mid-late 2023. This work is being undertaken in conjunction with the ongoing environmental and permitting work designed to obtain all necessary statutory approvals by the end of 2023, as we aim to rapidly bring the world-class Taronga project into production to provide provenance of supply.

Environmental, Social and Governance ("ESG")

The impacts of climate change are increasingly being felt around the world and First Tin is supporting a decarbonised future. We are committed to the environmentally sensitive development of advanced hard rock tin projects in conflict-free, low political risk jurisdictions.

The Company's goal is to develop and operate zero carbon sustainable tin mines that support the current global clean energy and technological revolutions. We remain proactive in our quest to reduce our carbon footprint and to demonstrate this, First Tin has identified a potential partner, König & Consultants, to support us in our search for solutions to minimise First Tin's design energy consumption. It is widely known that there are widespread constraints in energy across Europe, however, it is interesting to note that in Germany they have taken the decision to keep two of its three remaining nuclear power plants operational, indicating that measures are being taken to mitigate the current energy crisis. It is First Tin's goal to reduce our design energy consumption wherever possible, thereby minimising our carbon footprint and reducing future OPEX.

First Tin applies stringent environmental controls and procedures to minimise and mitigate its impact on land, water, air quality, climate and biodiversity and complies with the requirements of all applicable legislation, regulation and rules. The Company spends a considerable amount of time understanding the ESG risks and opportunities facing our assets in Germany and Australia, and I am pleased to report that our Environment, Health and Safety (EHS) performance is excellent, with no reported environmental impact or Lost Time Injury (LTI) caused by our drilling activities at both projects.

As a further demonstration of First Tin's commitment to reaching its ESG goals, the Company has commissioned Digbee Limited to undertake independent ESG assessment at both flagship assets with the results expected to be announced in the coming weeks.

Having a positive social impact and maintaining strong relationships with key stakeholders in the communities where our projects are located, is of critical importance to First Tin. During the period, we have had several consultations with local authorities, mining authorities and local government representatives in the areas our flagship assets are located, including holding a community meeting in Emmaville, Australia and participating in a community council meeting in Breitenbrunn, Germany where the Tellerhäuser village is located. During the next six months and beyond, we will continue to strengthen these relationships by regularly engaging with all key stakeholders in these communities and we look forward to updating shareholders on our progress.

 

Environmental, Social and Governance ("ESG") (continued)

 

We continue to invest in our people, providing them with the tools and training to support them to advance both our assets and during the period we executed numerous safety training sessions and software training sessions to ensure our employees are fully qualified and comfortable in their roles. We are committed to developing a diverse and inclusive team, and appointments made during the period reflected this.

 

Finance Review

 

For the first half of the financial year, First Tin recorded a loss before tax of £2.1m (six months to 30 June 2021: £0.4m), which included non-recurring IPO costs of £0.5m and a non-cash share-based payment expense of £0.7m. As expected, this also reflects the ramp up in activity, as we focus on capitalising on the exciting opportunities presented by our portfolio.

 

Importantly, as of 30 June 2022, our cash position remains robust at over £18.8m (at 31 December 2021: £2.5m), as a result of our successful £20m fundraise in conjunction with our IPO. This means that the Company is fully funded for 12 months and beyond, including being fully funded for all drilling and DFS activities ongoing across the Company's asset base, enabling management to create value in the long term for our shareholders.

 

Outlook

 

Looking forward, we expect to provide regular updates on our extensive drilling programmes both in Australia and Germany, designed to define additional tin mineralisation in both countries. We are fully funded to deliver all these value-enhancing workstreams, which will significantly de-risk these already advanced assets.

 

Our vision is to bring our two flagship assets into production rapidly, and the workstreams underway demonstrate our dedication to achieving this goal.

 

I would like to thank you, our shareholders, for your continuous support as we build our tin projects to support the global clean energy transition and technological revolutions whilst creating value for our shareholders. We are well positioned to take advantage of the sizeable, rapidly growing tin market.

 

T Buenger       

Chief Executive Officer