First Tin (LSE:1SN) — Interim Results

0:01 Good morning, and welcome to the FIRST TIN PLC Interim Results Investor Presentation. Screen. Just click Q and A, scroll to the bottom, type your question and press send. The company may not be in a position to answer every question received during the meeting itself. Have the company review all questions submitted today and we'll publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to turn you over to Thomas Bunga, CEO and Charles Cannon Brookes, non executive chairman. Good morning.

0:33 Good morning. Morning. Thanks very much, Paul. Very excited today to be able to present on the investor meets company platform. My name is Charlie Cannon Brookes. I'm a nonexecutive chairman of FIRST TIN. I'm with Thomas Bunga, who's the company's CEO. And before we get going, I think, you know, what is FIRST TIN and and what is FIRST TIN's aspiration and and USP? Well, FIRST TIN aims to become an ethical and reliable tin supplier. We aim to fill the looming supply gap that we believe the industry is gonna face for around 2025, which we believe will lead to significantly higher tin prices in the future. If I flip through, I assume everybody has no interest or has read the disclaimer, or b. But on slide three, that's a lot of happy smiling faces during the company's ringing the bell ceremony at the LSE on the 04/08/2022.

1:25 A happy day for the company, a proud day for the company. We raised £20,000,000 from investors. Probably nobody on this picture was fully aware of the challenges and headwinds that we would face in the coming weeks and months. But we're here today, Thomas and I, to to reassure investors that we remain very confident about the company's prospects as well as the TIN market prospects in general. So the corporate highlights of FIRST TIN. I mean, not many people know a huge amount about the tin market. It's a fairly small market in terms of competitive copper and some of the other base metals, often referred to as the spice metal. Tin is used in small amounts in in all electronics, that be it your iPhone, your electric vehicle, solar panels, and it's an absolutely critical metal in the electrification of a more sustainable world.

2:14 Currently, 97% of global tin supply comes from emerging and developing economies. That's the first thing I'd like to point out to investors and shareholders. 40% is derived from artisanal and often small scale mining practices, and the vast majority of supply comes overall from alluvial sources with highly unsustainable and environmentally damaging practices, and that's Indonesia, Myanmar, etcetera. You know, the world desperately needs new ethically sourced sustainable sources of tin, and that's really where FIRST TIN comes in. That's the reason we created this business. We have, as FIRST TIN, two advanced low CapEx development assets sitting in tier one jurisdictions. These are hard rock assets, so no alluvial, no artisanal mining here. They're late stage. You know, DFS studies have been completed on both assets or will be completed by the end of two thousand and twenty three. That's DFS and permitting.

3:08 We deliberately pick the assets that we have because they have low CapEx and therefore future low future equity requirements to execute the development strategy. Often, you see in mining, you know, companies with good assets, but small cap mining companies that really are unable to fund the large equity requirements. We deliberately picked assets that have attractive economics, but also critically low CapEx requirements. Our assets have shown through third party studies that they make money even at the current depressed TIN price and have huge leverage to higher TIN prices. They've had a lot of work done on them already. These are brownfield projects, likes of BHP and Newmont worked on our assets before. And therefore, you know, we we benefited and can benefit from a significant amount of previous exploration work. They have mining licenses on both assets.

3:56 And, you know, FIRST TIN PUST, the IPO has a very strong balance sheet, 18,000,000,000 plus in cash today. And we are fully funded to complete 24,000 meters of drilling, both DFS studies and all permitting over the next eighteen months for our two core assets. And those assets are Telehauser in Germany and Taronga in Australia. So in summary, we have, as a company, high value, low CapEx assets in an OECD based resource portfolio, and our assets benefit from significant infrastructure advantages. So I'm now gonna hand over to Thomas to go into more detail on on the company's portfolio. Thank you very much, Charlie, and, good morning to everybody from my side. My name is Thomas Springer. I'm the CEO of FIRST TIN. Like Charlie, I already introduced myself. Looking on to the next slide, I have grouped the slides into two topics, what we have achieved already during the first half year in 2022 as well, what we have planned for the next eighteen months. So let's start with the achievements.

5:00 We went public with our IPO at April 8, the actual year, and raised £20,000,000. Charlie already mentioned nobody was aware about the headwinds. I'm happy that we really managed to raise the 20,000,000 fund, which, by the way, enables us to finance all necessary activities to bring both flagship assets, Taronga in Australia as well as Teleheuser in Germany, an investment ready status. We acquired by IPO, Taronga, our flagship asset in Australia, one of the most advanced TIN mining projects in the world and one of the few ones beside Tellerhoiser that will that are mature enough to come into production until 2030, and it is represented by a very, very good mineralogy enabling us for a very simple flowchart.

6:04 And on top of that, we as well appointed a number of persons, so put in place two very operational teams that enables us really to develop both projects in parallel, into investment ready statuses. What have we planned for the next eighteen months? So we have commenced, both DFS studies for Tauranga as well Teleheuser, and we plan to finalize. We plan to finish them until end of next year. We put the environmental permitting for Taronga and Teleheuser in in process. So the the process is running for Taronga, and the environmental precheck even is submitted for the Teleheuser asset in Germany.

6:55 And we expect to finalize the permitting procedures as well until end of next year. On top of that, we have commenced substantial drilling programs for our Taronga and our Tallahassee asset. We quite recently last week published a press release that we have started to drill at our Taronga asset, and we do as well a drilling program at our Tallahassee asset, and we quite recently finalized an exploration and drilling program for our Gottersberg project. Moving over to the next slide, talking about a few fundamentals of the market. With Tellerhoiser and Taronga, we have two very advanced projects.

7:43 And there was a study done by the International TIN Association that identified only 11 TIN projects that are mature enough to bring them into production until 2030. Out of the eleven, three are in our hands, and Charlie already mentioned. We picked our assets according to being very mature as well as very low CapEx. Looking on to the right side of the slides, that's at least the supply demand comparison, what shows us that that we are running into a wall of demand for TIN because the TIN demand is driven by the change in energy generation moving over to the more renewable energy as well by electromobility and electronics.

8:33 All of that have very high growth rates during the next years driving us into a wall of demand that is by far not supported by supply so far, and we can't see how that will be. And we have planned to bring our assets into production during 2025, so kicking in, in particular, where the gap between demand and supply is still very wide. What are the major markets? So we we have seen mainly as well it became aware once more during the last few months with the energy crisis in Europe that there is that we are really now starting into the change of energy generation, energy supply moving over to renewable energies. One of the example is photovoltaics, which, by the way, is as well a big consumer for TIN, one of the big drivers with substantial growth rates forecasted until 2030, calling for substantial TIN volumes.

9:44 On top of that, the move to electromobility is another example where TIN is consumed a lot, and electromobile contains roughly three to four times more tin than a combustion driven mobile. That alone calls for an additional 55,000 tons of tin annually, looking onto a total market today of 380,000 tons, which is an incredible incredible increase in tin demand, which is as well a good driver and a good support for our projects. Moving further, what do we have in HENS? With Taronga, we have the five largest global TIN reserve based on ITA assessment, and we have the seventh largest global tin resource in our hands.

10:45 All in all, we are talking about a 143,000 tons of tin content, chalk compliant for our three projects for the two very advanced ones, Telehorzer and Taronga, and for a less advanced one, a second one in Germany called Gothersburg. So a 143,000 tons, which alone for itself already stays for roughly one third of an annual tin consumption in the world. Jumping over more on the details of the two projects, starting with our Tellerhoiser project in Germany. The project is situated around two fifty kilometers south of Berlin in the federal state of Saxony in former East Germany close to the boundary of Czech.

11:37 What is very special about the Tellahauser project? The Tellahauser project is sitting in a within a tin district with a very long mining history and a mining friendly environment. It is represented by a very, very low CapEx case with, $49,000,000 preproduction CapEx and very, very low C1 cash cost of around 12,000 tonnes. So it's really a very, very solid business case. And here with the TELLOHAUSER project, we are

12:11 as well aiming to realize our leave no trace philosophy, sir, to keep all the mining waste underground, sir, to have a very, very, very small surface footprint. Jumping over, zooming in into the the district. So the green surrounded, area is where we have mining license as well as exploration licenses. So the mining license is for the right hand side where you can read Pride and Prunnen Tellerheuser. And red, the green, and yellow and blue apples are representing the surface projection of the ore bodies in the region. The TELLOHUSER project is the red, the yellow, and the blue one, so representing a very, very large surface mining minable ore body.

13:09 On the right hand side, you will find as well the quite the newest drill resource from our Protersberg exploration at Schrodinger. Protersberg is situated on the left hand side of the building where we have intersects of 2.5 meters of two point seven two and seven meters of 1.6, 1.46% of TIN, and in total, 73 meters of o point 49% TIN. So really interesting high grade area that we identified indicating that further resource drilling is necessary.

13:48 Now having a look onto our Tellerheuser project. On the right hand side, the yellow and the blue lines represent the cut of the ore body and as well showing that with Tellerheuser, we own not only a tin resource but a multi metal ore body with a number of very interesting

14:13 products. Besides TIN, as well, we plan to produce a TIN concentrate and even more interesting, the critical raw material, Intium, which is as well part of electronics and fiber optics, so as well a critical raw material in Europe and a very interesting one. Jumping over to the left hand side, we have done a number of calculation with different tin prices showing that even at $20,000 per ton of tin, we have still a very robust business case with an NPV of 82000026% IRR, while the long term forecast for the TIN price is around $25,000 per ton of TIN, where we talk about a 173,000,000 NPV and 43% IRR.

15:16 Jumping further, what have we done in particular for the TELLOHAUSER project?

15:24 We commenced about four weeks ago a very big diamond drilling program with the aim to add further indicated resources to our existing inferred one. We expect FIRST SA results during q four twenty twenty two. We have commenced as well the DFS for Teleheuser with the German company DMT, and the completion is expected for end of next year, so quite in time as well with our expectation to receive the permit. The EIA precheck is handed into authorities, and we even expect there a decision during the actual year, which will might bring us then into position to check further our option for fast fast tracking permitting.

16:23 Moving over to Australia to our Tauranga project. Tauranga is situated about four hours drive South of Brisbane in New South Wales. It's it is a very, very large ore body, and it is sitting in a region where until the mid of the nineteen eighties has been tin mining. So all the alluvial material has been mined until 1985, and we are now developed the hard rock part of the tin assets. Taronga itself represents a very, very large tin ore body with a very simple mineralogy with very coarse castorite minerals.

17:16 Castorite is the tin containing mineral. We have here a slightly higher preproduction CapEx of $76,000,000 compared to our Tellerheuser case. Nevertheless, Taronga as well represents itself with very low c one cash cost of only $14,000 per ton of tin as well leading to a very high IRR. There are major exploration upsides because the the red box around Tauranga represent as well tin minuteeral outcrops that our mineralogist, our geos already identify and where we will put drilling program.

18:09 Maybe there is an option to develop the Tauranga project as well to a hub and spoke development for the adjacent ore bodies around our Taronga project. Tauranga is a a very simple hard rock ore body. So most probably the simplest available hard rock tin ore body in the world with very coarse cassiteride leading to a very simple processing flowchart. And we have it it's represented as well by a very large vein system. So it's a a large ore body.

18:56 Looking into particular into the Tauranga project, so it is represented by a v shape, so a perfect shape for a future open pit that you can see on the right hand side of the chart. We started already a drilling program for our Taronga project to do some twin drilling as well as step out exploration drilling as well. Looking onto the business case, some calculations on the left hand side prove as well that the Taronga business case is a very solid one. Tauranga as well is not only has not only a perfect v shape for for an open pit as well. It is represented by a very, very low strip ratio of only being one point nearly being one to one waste rock to to ore.

20:07 What have we done so far in particular?

20:09 We started the DFS. We awarded the contracts to Mincor, an Australian based company that is will do the job jointly with other companies, and we expect to complete the DFS until end of next year. Quite right at the same time where we expect to finalize the environmental impact assessment as well as the construction and operational permitting procedure. We have started a substantial drilling program at Taronga in order to do some twin drilling in order to validate the drilling results from the previsibility study that we inherited from the previous owner.

21:04 But we as well have planned an extension drilling for Taronga in the middle part between the two ore bodies as well to the Fassan direction where it is not yet finished. And we will do as well exploration and drilling at Great Britain, one of the ore bodies very close to our Taronga project. We expect first results out of all those drilling activities until end of the year beginning next year. We do not only talk about ESG compliance.

21:52 It needs to be as well measured independently. So we submitted for that purpose an ESG audit to the company, and we expect to finalize that within the next few weeks. And it's in the core of our heart to aim to have a very, very low carbon footprint as well as to minimize the waste of our mining activities. As I told you, for our German Tallahauser project, we even plan to keep all the mining waste underground, so to have no waste dump and, in particular, no tailings ponds at the surface.

22:39 And we have as well started already a joint study with one larger German lead smelting company, EcoBot, to do a study to investigate if we can have a very close tin smelter to our German project, so to limit the CO two from logistic processes as well. We will do that study during the course of the next months. So far, the actuals for the two projects, handing back to Charlie. You are on mute, Charlie. Thanks, Thomas. So, I think the chart on the left is is self explanatory.

23:27 You know, I think everybody who's been been active in the markets in the last few months will know that commodities in general have been have been a tough place to be. I mean, TIN is no exception. I mean, we listed the the IPO that the spot price of TIN was over $40,000 a ton. It's now just over $20,000 a ton. So the sector's been weak. No. There's no getting away from that. I think the chart on the left just shows that it's been weak for everyone. Cornish Metals has outperformed the the sector. It recently received some institutional capital, and and hence why I believe that that that is an outlier to to the norm. But the chart on the right, I think, is interesting. It shows, you know, Alpha and the Metals X, which are two of the well known names, the producing names in the sector.

24:14 You know, good good quality assets. You know? And it really just shows the arbitrage of of what FIRST TIN can do and the other private companies, Scottish Metals, Afritin, and Stella, you know, if they're able to show to the market that they can develop go move from a developing phase to a production phase. And that's very much the aim of what we're trying to do over the next twelve to eighteen months is to show the market exactly that, that this is a a company and this is a set of assets that will end up being producing assets, not just development assets. And if we're able to do that in the next year or so, then that arbitrage will significantly reduce or will will end up end up on a much higher EV per per ton TIN ratio. So the summary of the shareholdings, we have Austin.

25:00 We acquired the Atronga asset from Austin, so they became our largest shareholder as part of that transaction of the IPO. Baker Steel, a well known resource investment company, is our second largest shareholder. And and directors, when you see directors, that really is Thomas and myself owning a very large percentage of the company. We we invested a lot of money to get that eight and a half percent. In fact, probably, our in price is a premium to where the market is today, not probably, definitely. So, you know, we are very aligned with shareholders, very, very committed, have a lot of skin in the game until, you know, that the current price is certainly not a reflection of of what the company the real value of the company's underlying assets. So sitting here today, I mean, at a at a 15,000,000 approximate enterprise value, we feel that, you know, significant upside if we can deliver in the next twelve months on on what we're aiming to do.

25:53 Yeah. So thanks, Charlie. So leading to the summary of our presentation. So we presented to you what we have achieved so far as well as our plans for the next eighteen months and even looking forward to 2025, the year when we plan to put those assets into production. So we are really in a good position to step to enter the market where still the supply demand gap is still very wide open and so it's very wide. So we are perfect positioned time wise. We have mature projects, and we aim to do as well ESG compliant assets in tier one jurisdictions, which is a major difference to most of the TIN miners, which are mainly sitting in Malaysia, Indonesia, China, Congo, and only to a lesser extent, in Australia. So there is a substantial gap in ESG compliant tin supply. We will exactly jump into that gap.

27:12 We are fully founded to develop our two projects, forward to become them investment ready until end of next year. And even more as well, we can finance substantial drilling programs for the assets itself as well as to expand the actual resource statements. We have commenced the DFS studies, and we plan and feel in a position to finalize that as well until end of next year. We identified a very low CapEx case for both projects, so an executable kind of situation. And we will take care as well that that will remain that way. And we have put in place a very, very strong operational team and board, which enables us to develop those projects in Keppel Kavalier to become investment ready. So in a nutshell, we promised a lot during IPO and marketing and fundraising at the beginning of this year.

28:20 So far, I'm in a position to tell you that we are in line with our promises, that we are in line with our plans, and that I can't see so far, and I have not identified any red flags that we can't achieve to become those assets investment ready until end of next year. Thank you very much. Fantastic. Thank you, Thomas, Charlie. Thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions just using that Q and A tab just in the right hand corner of your screen. But just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Thomas, if I may just hand over to you just to click on that q and a tab and just where appropriate to do so, if you could just read out the question and give your response or direct it to Charlie and I'll pick up from you at the end, that'll be great. Yep.

29:15 Thank you very much. Thanks for all the do so. So I have one question. I will read it first, and then I will answer. The question is, assuming all projects run to plan, when will the company first produce cash flow sufficient to cover running costs? I promised during the marketing and as well, I explained during the presentation that we plan to put those assets into operation during 2025. If all plans will turn out like they are, that means the cash flow to cover the cost, we will generate first in 2026.

30:10 Next question. Economics of the projects, will you look to bring them onstream and tandem? And what is the strategy for funding production? So far, we developed those projects in parallel because looking onto the topics to be solved, and here, I mean, to to execute the PFS studies for both of the projects as well to finalize the permitting application and to receive the permit permits.

30:58 So far, it looks like both projects can achieve the same timetable to become investment ready. If it will really turn out like that, the next eighteen months will tell us because there, we have as well a number of partners in the process. And once we have identified if that will become really the case, we will define potentially with which one we might move first and which one will become the second. But the process will tell us that we can't decide that yet so far. And the funding will most probably become a mix out of equity and debt financing that we the strategy to fund that we will develop during the course of the next months.

31:58 Next question. How do you explain the disastrous fall in the share price since the IPO? If we go back, to the slides that Charlie explained that shows the share price development for FIRST TIN on the left hand side as well as a number of other peers developers as well as companies that are already producing TIN, so generating cash flow. There, one can state that basically the share price of all of those companies followed the TIN price development. So we have seen a TIN price peak, if I remember correct, around the March 4, peaking nearly $50,000 per ton of tin.

32:54 And since then, it's dropped reaching something like a plateau around two months ago in the region between 20 and $25,000. And since then, share prices as well as our share price moves sidewards. Next question. Are you impacted by supply chain issues? And if so, will this have any impact on the timelines and news flow for the project? So far, we are not impacted by supply chain issues because we commenced and awarded studies as well as drilling program.

33:45 One can expect, some impact, later on. We will identify, in particular, the potential lead times for major equipment parts during the course of the DFS. So I expect that the supply chain issues will be reduced during the course of the next months worldwide. So hoping to be exactly at the right time when supply and questions are closed. Today, I can't answer, it really in detail. It's by far, too early.

34:38 Next question. Do you expect to be able to command a higher price for your TIN as a consequence of your more environmentally friendly approach to producing it. Well, looking into the past, there is no one commodity neither tin nor any other that has a quality premium in regards to environmental friendly production. One exception, just during the course of last week, a first copper producer, aims in Austria, to introduce a premium for ESG compliant produced copper.

35:37 Be sure that I will monitor very closely the way that the premium will become introduced. Nevertheless, one might expect that that potentially can happen to have a premium for ESG compliant production because it might lead to higher costs attached to ESG compliant production. So far, no success case for any of the commodities visible. Has there been any specific hurdles that have come to light since IPO in either project's development?

36:26 No, we don't have identified any red flags so far, and we are still confident to deliver against our scheduled promised during IPO and marketing campaign so to get those projects investment ready until end of next year. Are there any EU initiatives that you will be able to access? We followed it very closely, the EU initiatives, for raw material supply, for critical raw material supply in particular. There is no proof, neither a guarantee, that we will become excess, but, we are listed, and we are a member of the European raw material initiatives, where, in particular, the critical raw materials are closely monitored.

37:24 So if there will become something available, we will try to become part of that. Thomas, thank you very much indeed. You've actually answered every single question we've had through. And, of course, if there are any further questions that come through from investors, the team will be able to review those. And we'll publish responses where appropriate to do so on the investor meet company platform. Thomas, just before redirecting investors to provide their feedback, which I know is particularly important to you and the team, if I could just ask you for a few closing comments, please. Yeah. Thank you very much. Happy to do so. It's my pleasure to do so. First of all, thank you very much that you listened to our presentation. One second that you state or became our investors to develop FIRST TIN to become one of the very rare ESG compliant tier one TIN suppliers for that particular critical raw material, which is really the enabler.

38:26 Charlie called it the spice metal. It's the enabler for the energy transition, for electromobility, as well as electronics, where it is, unfortunately, most often forgotten, but it is the enabler. So thank you very much for staying with us, and I'm looking forward for further questions and hopefully as well to meet you soon at a one or another occasion. Thomas, Charlie, thank you indeed for updating investors today. Can I please ask investors not to close the session? Should be automatically redirected to provide your feedback in order the team can better understand your views and expectations. It's only take a few moments to complete, and I know it's greatly valued by the company. On behalf of the management team of FIRST TIN PLC, we'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good morning. Thank Thank you.