First Tin (LSE:1SN) — HY 2023

0:01 Good morning, ladies and gentlemen, and welcome to the FIRST TIN PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so, and these will be available via your investor meet company dashboard. Before we begin, I would like to submit the following poll. I would now like to hand you over to the executive management team from FIRST TIN PLC. Thomas, Tony, good morning. Good morning. Good morning.

0:51 Thanks a lot. Good morning to everybody. Happy to hear and I'm here to present jointly with Tony our first half year presentation. Most probably you have read that very carefully. So let's dive in into the most important topics we have done during the course of this year. FIRST TIN represents two flagship projects with 100% ownership, one in Australia, one in Germany, the Australian project. Both of them are under development. Feasibility studies are under end

1:38 of work during the course of the first half year. So for instance, we finished the confirmatory drilling program at Taronga in Australia, and we quite recently published the update of the resource statement. We have started the definitive visibility studies in Australia and Germany last year, and we proceeded with all the activity during the first half year, looking forward to finalize the DFS for our Australian project Tauranga until rough until next year. We have developed a very cost sensitive flowchart for our Australian project. We just recently published that in a press release that we were able to, with only mechanical crushing and upgrading steps at the very beginning, to produce a decent concentrate with good recovery rates. Details will come later.

2:49 Both of the projects show a robust economic at the actual TIN price of around 25,000 US dollars, which has seen a lot of volatility during the last months. TIN is still the most forgotten enabler of energy transition and digital revolution, even though it has been declared in a few more countries as a strategic and critical raw material. And I'm happy that I and FIRST TIN has such an experienced management team leading the company and bringing the two projects towards investment ready.

3:39 We quite recently Ross Eichner is the new board member, so he joined just a few days ago and replaced Seamus where we who we sang for all his contribution because he moved to another role.

4:02 Let's have a look into the market environment and how it looks like. So TIN, which is which which its major application being soldering is the critical enabler and most often overseen metal of the energy transition. So looking into the major applications, we have seen weakening in electronics production. First half year was down by 25% year on year, while during the last two months, we have seen a slight recovery coming up 12%. This is most probably the well known cyclicality in the microelectronic industry.

4:52 And we are looking forward and we expect market forecast companies expect a recovery of debt, because it's of utmost importance to have enough electronic chips for all the topics, be it computers, be it electromobility, or energy transition. What has developed very good was the solar industry. So we have seen a 40% growth rate year on year for photovoltaic panels. So a major contributor to the energy transition and as well a major demand driver for TIN.

5:35 Tin has been critical raw material in The US and Germany already since a number of year, while Indonesia quite recently declared it a critical raw material in parallel to its attempt to that they declared that they will restrict the export of tin in the coming years, aiming to extend the value chain of TIN within Indonesia.

6:14 What major topics have been arised on the screen of the TIN market? So the Myanmar Wa province Wa state has declared at the beginning of the year that they intend to suspend all tin mining operations starting from 08/01/2023. This has really happened. So all tin mining closed down in the Vapra winds. Only a few stockpiles have been treated and shipped to its customers. What means that its customers, the major receiver of all of this tin concentrate is China. The Chinese reacted onto first the announcement. So they have built up inventory stock and they published that they expect that a shutdown will take three months. So they have built up inventory, TIN inventory for about three months. Nevertheless, all the major smelters in China reacted and either reduced their throughput or entered into maintenance shutdowns in order to deal with the lower availability of raw material.

7:36 Indonesian has as as another substantial contributor to TIN supply in the world showed that its TIN supply has fallen during 2023 as well, leading as well to the situation that the regulator, which is requested to renew smelter licenses on a regular basis, has not done that for eight out of the 33 pirate smelters in Indonesia, and as I said already, has declared tin as a critical real raw material, just a few weeks ago in August.

8:26 If we look the long term history and the price development of TIN, then one can see that we have a number of patterns that mirror from time to time. So means nothing else that after a substantial price decrease, which we have seen remembering that in April 2022, we have seen a price peak of nearly $15,000 per tonne of tin. And afterwards, it declined down to 17. So down to the long term average over the last fifteen years roughly, and it recovered slightly now up to 2025.

9:15 And it looks like that 2025 might represent the new floor, while it looks like that 30,000 might be the major price level that will attract new project developments, remembering that our project show rose already at $25 per tonne of tin. A quite recent resource update for resource statement update for our Taronga project. Our Taronga project became the eighth largest resource globally.

10:01 And we represent with our two flagship project a substantial size in the undeveloped TIN reserves globally.

10:23 Tony guiding us through. Yes. Thanks, Thomas. So let me run you through Tauranga first, which I'm most closely involved with. We've got the fifth largest undeveloped TIN resource and reserve globally. So, we've recently announced an updated resource, as you can see in the table on the top right hand side, of 138,300 tonnes of tin. That's due to several reasons. One is we've discovered quite a lot of extra tin to the south of node mineralization.

11:16 And we've also remodeled it geologically and lowered the cut off grade. The cut off grade that our consultant has recommended we use is 0.05% TIN. When we look at the economics of the deposit, the engineers who are doing the engineering study for us are suggesting that a realistic cut off for this mine is probably going to be in the order of between 0.060.08% TIN. So, using 0.05 is quite realistic. If you want to compare it with the previous estimates, you can look at the table below which shows the same resource at a 0.1 cut off.

12:09 And so you can see that we've kept the grade approximately the same. We've increased tonnes tonnes of tin metal by about 40%. So the current resource at that cut off is about 80,000 tonnes of tin. Forecast production is around about 3,000 to 4,000 tonnes per annum of tin in a bit of 55 to 60% concentrate. So, what makes Toowonga interesting? We've spent roughly AUD 4,000,000 buying all the land that the deposit sits on. There is only one small block of Crown land that we now need to get hold of.

13:00 Essentially, we have freehold land ownership, which takes a lot of risk out of the permitting process. It's got a very low strip ratio. We're currently looking in the order of 0.9 tonnes of waste for every tonne of ore. So, that's extremely low in terms of most open pit deposits. We've got very simple metallurgy. That's due largely to the deportment of the TIN which occurs almost exclusively as cassiteroid within fracture sub vertical fractures that are filled with quartz, cassiterite and mica.

13:46 And the rock strength of the veins is much less than the host rock. So when you break it it breaks open on the veins and liberates the cassiterite at a very early stage, which I'll go into a bit more detail on shortly. We are looking at solar power. We've got grid power is readily available. We've done some studies and connection cost to the grid is in the order of 3,000,000 Australian dollars. So, that's a fairly easy way to have our core power. But we've also got very good wind and solar characteristics in the area, and we own a lot of land, as I said. So, we're doing studies on both solar and wind power at the moment.

14:42 Water rights, we've had we've purchased an allocation of $6.36 megalitres a year. That currently looks like it will supply all our needs. We're actually starting drilling on Monday next week for water into an old paleo channel. So we've got, we think we've got our waters, tied up. And those are very good. We've got very good relationship with the local town and, which has a long history of mining, which gives us a social license to operate. So, going back, the main difference between Tauranga and any other tin deposit I've seen is the very simple mineralisation style and the mineral processing characteristics is associated with that. People often ask, you know, how can you make such a low grade deposit work?

15:51 And it's basically down to this fact of having all our mineralization in veins as considerate and having a very very low strip ratio. So the liberation if the considerate when we crush the rock as I said it tends to break on the veins and wet by simply crushing to 12 millimetres and then screening out all the minus 2.8 millimetre material. We immediately upgrade the the grade by a factor of two to three. The plus 2.8 millimetre we're currently looking at doing some one more crush for a vertical impact crusher, and that liberates a slightly more TIN, and then that's it as far as crushing goes.

16:50 So, you can see here our hot, what we call a high grade sample which is still very low in terms of grades in the tin world is point 18% tin. So by by crushing it and throwing away everything above 0.28, 2.8 millimetres, we capture 85% of the tin in 45% of the mass, and we upgrade the grade from 0.18 to 0.3.

17:25 And the plus 2.8 millimetre fraction is an immediate throwaway product. We did that work and then we thought, well, does this work for the lower end of grades we're looking at? So, we've taken another sample of 0.1% TIN and essentially gave us almost identical results with 84% of the TIN and 58% of the mess and upgraded it by a factor of a 150%. So based on, this very simple and easy upgrading, what we have is a very, very simple flow sheet. So we, we mine it, we put it through simple conventional three stage crushing.

18:14 We end up with a stockpile of minus 12 millimeter material, which we then feed into a vertical shaft impact crusher to scavenge a little bit more of the tin. Then we end up with an immediate reject and that gets rid of 50 to 60% of the mass at that stage. Following that, we we screen the material at point four of a millimeter with the plus point four millimeter gain to jigs and the minus to spirals. And it looks like it's fairly complicated here, but it it's not really. It's essentially going through spirals and then being cleaned up by a shaking table. With the the oversized material that that's circulating in the middlings going into a ball mill. By the time it gets to this ball mill, we're down to approximately 20% of our initial feed volume.

19:15 So, a very low cost for crushing, for grinding rather. And at that stage, we're only taking it down from approximately 0.4 millimetre sorry, from two point maximum 2.8 millimetre down to about 0.3 of a millimetre. So very short residence time and power consumption in these ball mills. So once it's gone through the spirals and tables, we basically into a batch dressing. So we clean it up via floating off the sulfides that remain a little bit further upgrading.

20:05 And that takes us to around about a 56% TIN concentrate. We have done work on trying to improve that, and we can get the concentrate up to 73%, but that does lose more TIN. So, we'll get it to the concentrate grade that we think we can make the most value out of at this stage.

20:33 So, again, I mentioned briefly that currently power costs in Australia are estimated at about 28¢ per kilowatt hour Australian. And we by using solar and wind, we can probably get that down to 5 to 10¢ per kilowatt hour. We're using grid power as our baseline and looking at only crush doing all the crushing. Sorry, let me go back to the previous slide. So, the crushing here is only done in daylight hours. You'll notice in the top left hand corner, we've got ten hour operation and the rest of it is twenty four hour operation.

21:20 Most of the power we use is in the crushing. So that but if we only crush during daytime, we can use solar for a fair proportion of fat crushing and that really saves us a lot for our power costs. So, I will now talk briefly about Germany. So, our Telehouser deposit in Germany has around about 5,300,000 tonnes of resource at 1% TIN. So, you can see it's five to 10 times higher grade than Tauranga.

22:07 And it still gives us significant amount of TIN metal. Well, if you look, remember the previous table on the resource, a significant portion of that resource is inferred. What we've been attempting to do over the last six to twelve months is to convert more of that inferred resource to indicated. Unfortunately, that's a very expensive task when you consider that we have to drill 800 meter diamond holes to reach better part of the ore body. However, we did manage to hit it four times.

22:55 And in each case, we proved that there is a significant thickness of the scan host rock with plus 1% TIN and plus 2% TIN in places in each of those. So, certainly proved the concept that the mineralization is continuous and good grade. We had an exploration program at the Goddessburg deposit, which is about 25 kilometers away from Tallahassee. We've always considered that to be a potential satellite deposit. And we had some very surprising high grade and wide intercepts there in our exploration.

23:43 So, you can see 73 metres at half a percent TIN from 90 watt metres and nearly seven metres at one and a half percent tin from 143 metres. These still need to be followed up because this is very early stage compared with our Telehouser deposit. So, I'll now hand you back to Thomas, who will tell you a little bit more on the corporate side. Yeah, thanks a lot, Tony. We have not only promised to develop the two flagship projects further towards investment ready, which we expect during the course of the next year, but we as well promised that we develop our resources that our projects that are located in Tier €1 restrictions, so a very rare case in the TIN world, remembering that about 80% to 85% of the TIN today mined tin is mined in developing countries, naming a few of them.

24:54 Myanmar, I already mentioned, Indonesia, China, but as well, Congo and Bolivia. So those are the major players in the tin mining world today.

25:06 And about 40% to 45% of the total mined tin is mined by artisanal mining, where we see two tendencies. The one is that the artisanally mined resources are depleting, one. And second, unfortunately, in that kind of business, usually, you can see child labor. And we committed ourselves to a conflict free production of future production of our TIN concentrate. Therefore, we achieved last year an ESG rating by DICKBY, and we as well implemented a number of policies.

25:57 According to those, we are acting, for instance, how to cooperate with the local communities looking for as well for local employment and to develop our project as environmental sound as possible. To give you an example, for instance, our German project, we are trying to minimize the footprint and by selling as well the waste truck to a large extent and using the remaining materials, so the processing residues from the ore processing to use that as backfill to bring the material, the unusable material back into the mine.

26:50 First of all, to stabilize the overburden in order to enable us to mine as well the remaining pillars that previously stabilized the overburden. Tony already elaborated a little bit on our attempts to get to manage renewable energy supplies, because he talked about the our project to check what is the cost and what is the CapEx for the installation of solar panels or windmills in order to supply our Australian future Australian mine with renewable and second, cheap energy, where we, for instance, foresee an oversizing of the crushing parts to run that during the day as the major energy consumer.

27:49 Our share price hasn't developed very good since our IPO. What you can see here more or less is the TIN price development that happened during the last one point five years and our share price unfortunately followed that. So it was not mirroring our attempts and our successes in developing and delivering our promises to develop those projects towards investment ready, neither the operative successes that we have published during the course of the last year, to name a few of them, updated resource statement with Taronga and achieving a 240% increase in resource,

28:43 neither the achieving the eligibility of a full blown environmental impact assessment in Germany and being eligible to the fast track permitting process. So that has not been mirrored in and not valued in our share price development. What has not changed a lot over the last since the IPO are

29:12 the total shares of the significant shareholders. So, Klarra Resources, the former Aus TIN, so the former owner of our Australian project is still at nearly 23%, while Baker Steel remained at nearly 14%. And directors as well own close to 10%. So you see there is a lot of skin in the game. So we as well feel jointly with our investors in regards to the share price development.

29:49 If we compare ourselves to the competition, Elementus and Stella are a good comparison and that shows that there is substantial upside potential in our share price once the market will recognize our successes and as well that we represent most probably the two most advanced projects in the TIN world that are able to contribute in the second half of the 20s to the then expected fast growing demand for TIN. So let me summarize what we have done during the last half year.

30:45 We have the two DFS underway and well advanced. So we expect to finalize the DFS for Taronga until end of the year. That one for Teller, however, for the German projects until end of Q2 coming years. For both projects, we have started the permitting procedures, and we expect to achieve the permits in the second half of the coming year. So then having definitive visibility studies finalized and on hand and as well the permits, so achieving then an investment ready status. We delivered according to our hypothesis and promises that we with simple,

31:32 mechanical, crushing and spiraling in check steps, we are in a position to produce a high grading concentrate with good recovery rates for Tauranga. So let's say, in a nutshell, we cracked the code of the low grade Tauranga asset to translate that into good concentrate with good economics. We did some further developments for the German project as well there. Some further processing improvements investigations are underway as well. The two projects show at the actual status a robust economy, a robust profitability at the actual tin price of $25,000 per ton of tin with those of them with significant leverage to higher tin prices and for the German project for sure, because this is a multi metal project with significant leverage to higher zinc and indium prices as well, because those are the two byproducts that Teleheuser will produce in the future as well.

32:46 TIN is the enabler of the energy transition and the digital transformation. Unfortunately, most very often overlooked, nevertheless, without TIN no electrical connection, so that's not substitutable. And last but not least, we have a very experienced management team that's delivered exactly what we have promised during the course of the last half year. Thanks a lot. And now I would like to finish the presentation. Thomas, Tony, thank you very much indeed for your presentation this morning. If I may just jump back in there before we move to the questions. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen.

33:39 But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Tony, Thomas, as you can see there in the q and a tab, we have received a number of questions throughout your presentation this morning. And thank you to all of those on the call for taking the time to submit their questions. But Thomas, Tony, if I could just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Yeah. Thanks a lot. So I would like to combine two questions if you don't mind. So, there are two questions that mirror that our share price has been going down since the IPO and is not mirroring our successes.

34:36 So what and both times the question, what are we doing to improve? So we will proceed to finalize the DFS for those projects as well to run through the permitting procedures to bring both projects into investment ready status. That's my potentially is the next status where the market then will really value our success because if I take a look into how the share prices of other TIN developers has been developed during the course of the last months, it's more or less one and the same like ours, like the FIRST TIN share price.

35:28 And I expect that the market will recognize and value first in higher 1s, then the DFS is delivered, and we are closer to the achievement of the two permitting for permitings for Taronga as well as for Germany. An additional question is on the valuation of the company, will that make funding negotiations harder and will it make us more vulnerable to acquirers? Actually we I have talked to potential projects, financing companies in early stage, because we are far away from entering into debt negotiation, because the first question they raise always is kind of have a look into the PFS.

36:36 So that's the earliest stage to enter into a substantial discussion. Nevertheless, the early discussion shows that there is good that there are promising expectations that once the projects achieve an investment ready status then project investment might become feasible. And on top of that, for sure, we hope that during the course of the next month, the world economy will return back into a growth rate, in particular, the electronics industry. So that potentially will drive the TIN price and most probably FIRST TIN will benefit from that as well.

37:26 Maybe one for your question, Tony, the in regards to requirements. Yes. So, question is, what are the capital requirements to take the projects to production? And what is the strategy here as the markets are not that buoyant? Well, we currently well into our feasibility studies. So, the answer to that question will come out of those. However, I can tell you that we're aiming for around about 70,000,000 US for funding for Tauranga. It's just over 100,000,000 Australian.

38:13 And for Telehazard, our previous estimate was, around about, US 50,000,000. So so they're both relatively low CapEx, projects. And the strategy there, I think, is to try and make both of the projects bankable so that if we want to, we can obtain bank finance. Both of the feasibility studies we're doing at the moment you could call bankable feasibility studies. Do you want me to take the next question as well, Thomas? Yeah, yeah, go ahead. The question is based on the two year low price of $17,000 per tonne tin, what are the economics of the projects based on the worst case price scenarios?

39:17 In answer to that question, we think that the breakeven price for both projects and our cost of production will be around about that level. So, at that price, I'd say we're probably breakeven at best and so essentially not economic to build at this stage. Maybe I can add a little bit background to that question, so not in particular to the 17, but or to our CapEx requirement. But I have seen publications that talked about Pitay the Indonesian mining giant in the TIN world. And in the publication, it was claimed that Pitetima might have a requirement of $30,000 per ton of TIN to operate profitable.

40:21 Looking onto that and the sheer size of the company that might indicate that $30,000 is maybe the new floor price that potentially will motivate further TIN projects developers to develop their projects into production, into operating units. Looking onto that and our robust economical figures at $25,000 So in the long term, most probably the in the future, in the long term, the former 17 ks TIN price is most probably not anymore the floor, but this will end up substantially higher, bringing us into a well profitable region for our two projects.

41:17 Thomas, Tony, if I may just jump back in there and thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this morning. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, just for you to review, to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the investor meet company platform. But, Thomas, perhaps before really just looking to redirect those on the call to provide you with their feedback which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with that would be great. Yeah, thanks a lot. Yeah, looking forward to your feedback and I hope that we that Tony and I could show you that we have achieved a lot of milestones in the project development of our two flagship projects, Taronga and Tellerheuser and with the most important milestones, so to mention 240% increase in resource for our Taronga project as well as the success to crack the code of the low grade Taronga project to process that into a high grade TIN product with good recovery rates.

42:41 So I guess those are the two most important milestones of the last half year and we're looking forward to finalize the DFS for Tauranga until end of the year. I believe we have delivered exactly to our promises. So we invested the money exactly in the development of the project. Didn't spend much for other activities. So looking forward to the end of the year to deliver the DFS. Thanks a lot. Thomas, Tony, that's great. And thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations.

43:35 This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of FIRST TIN PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.