ASX BRIEFS
Welcome to 'ASX BRIEFS,' the definitive podcast for enthusiasts, investors, and professionals keen on staying ahead of the curve in the Australian Stock Exchange (ASX). Hosted by Andrew Musgrave, 'ASX BRIEFS' delves deep into the heart of Australia's financial markets, bringing you insightful conversations with the minds shaping the future of investing down under. Each episode, join Andrew as he interviews a diverse lineup of fund managers, executives, and industry insiders, offering you a unique blend of expert analysis, strategic insights, and the latest trends affecting the ASX. Whether you're a seasoned investor or just starting out, 'ASX BRIEFS' is your go-to source for comprehensive updates and thought-provoking discussions designed to inform, inspire, and empower your investment journey. Tune in to 'ASX BRIEFS' and take the pulse of Australia's financial markets right at your fingertips.
ASX BRIEFS
ELEMENTOS LTD (ELT) - How Elementos is Transforming Critical Mineral Supply Chains in Europe and Australia
Critical minerals lie at the heart of the green energy transition, yet many remain under-appreciated by investors. Tin - essential for electronics, solar panels, and batteries - stands out as particularly vulnerable with looming supply shortages and concentrated production far from end users.
Joe David, Managing Director of Elementos Limited, reveals how their company is positioning to address this critical gap through two strategic projects. Their flagship Oropesa project in Spain's Andalusia region recently completed a Definitive Feasibility Study showing remarkable economics: $270 million NPV and 26% IRR using conservative pricing assumptions. For a company valued at just $20 million, this represents substantial potential upside.
What makes Oropesa truly strategic is its position as Europe's only vertically integrated tin mine and smelter. David explains the startling reality that neither Europe nor North America currently have any domestic tin mines, despite being major consumers. By establishing a complete mine-to-metal operation within European borders, Elementos not only addresses geopolitical supply risks but also captures the $1,000 premium that tin commands in European markets compared to standard prices.
Andrew Musgrave Host
Welcome to another episode of ASX Briefs, where we spotlight the companies at the heart of critical mineral supply chains and the transition to a greener global economy. And today we're speaking with Joe David, the Managing Director of Elementos Limited, a focused tin development company with major projects in Spain and Australia. Joe, thanks for joining me today and welcome to the ASX Briefs podcast.
Joe David Guest
Yeah, thank you, Andrew. Absolute pleasure to be here.
Andrew Musgrave Host
Now, Joe, for listeners that may be unfamiliar with Elementos, can you provide a brief overview of the company?
Joe David Guest
Yeah, absolutely. So, Elementos is a TIN developer. We've got two assets in development our flagship Oropesa tin project in Andalusia region of Spain and our other asset is in the northwest of Tasmania. It is the old Cleveland tin mine of which we're currently redeveloping. I wouldn't expect a lot of your listeners to be super familiar with tin. There are very few tin projects around the world and very few in development, so only two listed producers in the world and a handful of us developers. So, you know we're in a really good space.
Andrew Musgrave Host
And Joe, congratulations on the release of the DFS. So how significant is this milestone for Elementos and to the broader tin market?
Joe David Guest
Yeah, absolutely, it's massive. For us it's certainly a milestone we've been working to for a number of years. In addition, with the DFS we submitted our primary approval. So, you know in total we're talking 20,000 pages of documentation. So, you know you imagine the amount of work that goes into that for a small junior mining company like ourselves. But we're really happy and the economics speak for themselves. You know we've got $270 million NPV payback in 2.7 years, 26% IRR. These are all very good numbers, using a very conservative tin price. So, for us it's important when you're a mining company to use a conservative price as your underlying assumption to get you through you know the peaks and troughs of the volatile commodity markets. So, for us, using $30,000 is a nice conservative number. Certainly, the tin has traded significantly higher than that in the past, while we're only a $20 million market cap company. So, putting out a $270 million NPV for one of your two projects is certainly a very positive place to be and certainly we've got a very nice base to market ourselves on moving forward.
Andrew Musgrave Host
And, with a maiden ore reserve now defined, what's the company's next focus as you advance towards a final investment decision?
Joe David Guest
Yeah, so for us it's pretty classic for a junior at this point. We'll move forward with our project financing discussions. As our project's based in Europe, we have a number of European partners we're working with both on debt and equity. We also work forward on offtake. So, offtake is the sales agreements you have for mining projects because we are a mine to metal we include smelting in our value chain. Where we're currently offering it'll be working with off takers that want to buy tin ingots and tin metal rather than tin concentrate. So, we're working with a number of partners to lock down those off-take agreements. As well as that, we're working through our final licensing approvals with the Andalusian government in Spain.
Andrew Musgrave Host
Okay, and just touching on Spain. So Oropesa is set to become Europe's only vertically integrated tin mine and smelter. So, what strategic advantages does this positioning offer, particularly in light of global supply chain vulnerabilities?
Joe David Guest
Yeah, so in fact neither Europe or North America, two of the biggest users of tin, have even a tin mine at the moment. So, there's no tin mines in those two major economies, let alone a vertically integrated ones. So, the tin industry is very focused on Asian based smelting. So, most of the projects around the world produce their tin concentrate and send them to Asia.
For us, being mine to metal and vertical integrated with European Union, we're really solving all the geopolitical risks that currently exist around the world, not only in Asia but with, obviously, the growing trade war. So, for us, being fully set within the borders of the EU really moves a lot of those risks that currently a lot of other projects are seeing around the world. In addition to that, I think all good business decisions are built off a solid economic base and for us, because of the lack of tin smelting in Europe, tin actually trades for a premium above the London Metals Exchange in Europe. So, for metal delivered in Europe it's currently about $1,000 above the $30,000 reference LME price. So, there's a really strong economic incentive for us to be mine to metal within Europe and not have to send our concentrate through Asia to be smelted.
Andrew Musgrave Host
And, from a regulation perspective, you've lodged the primary license submission. So how is this process progressing?
Joe David Guest
Yeah, so we just lodged them. So, we strategically lodged them a couple of days before our DFS, but what that gave us the opportunity is for absolute full alignment. So, the business case and the mine design we're presenting to the government is the exact one we just presented to our investors on the ASX so for us full alignment there is critical and certainly we'll now work for with the Andalusian government. All our, all our licenses are assessed on the regional level in Spain, in Andalusia, and, yeah, we're working with them very closely. We are a state significant project in Andalusia which puts us at a, you know, level of communication with the government you know, nice , a primary uh conversation to have with them there and, yeah, very much looking forward to closing that out.
Andrew Musgrave Host
Okay, and coming back on shore, the Cleveland project in Tasmania continues to grow beyond tin and copper, with tungsten, rubidium and molybdenum now identified. So, what's the updated vision for this asset?
Joe David Guest
Yeah, so the full suite there is pretty interesting, so historically, a tin mine that produced copper up till 1986. As you said, we've got tungsten at depth. We do have some of that resourced, as well as identifying some extensions to that in our drilling campaign last year. But I think what really surprised us a nice surprise was those other critical minerals rubidium, fluorite, bismuth and molybdenum all being identified as well. So, for us we're sort of the early stage of really defining those critical minerals suite. But while we're at it, we also hit a pretty nice intersect of copper, gold and silver about 70 meters from surface. So, we're currently drilling that shallow target right now and looking forward to getting those results out to the ASX in the next couple of months.
Andrew Musgrave Host
And could Cleveland potentially be developed as a standalone critical minerals hub?
Joe David Guest
Yeah, it certainly could be. Yeah, absolutely. The very large porphyry-style tungsten. Yeah, porphyry sitting underneath the tin copper resource is still awaiting to be closed off and fully defined, so it could be quite a substantial project in its own right.
Andrew Musgrave Host
Okay, now looking at things from a global perspective. The International Tin Association has forecast demand growth of up to 428,000 tonnes by 2030, with growing deficits. So where does the Spanish project sit in the context of the tightening global supply?
Joe David Guest
Yeah, we're very fortunate. The International Tin Association did a specific news coverage when we put out our DFS and that now defined us as probably one of the most likely new projects to come online and fill in that supply gap. So even with all the current projects coming online, including ours and the other suite of developers that are trying to get their projects up there's still deficits predicted. So, we think we're first ranked, or one of the first one or two, to come online, into those deficits. But even with them all coming online, we still won't meet the forecast demand. So, a very, very healthy market there.
Andrew Musgrave Host
Okay, and with the DFS highlighting strong ESG credentials, including renewable power sourcing and low environmental footprint, how is the company preparing to meet the expectations of ESG conscious investors?
Joe David Guest
Yeah, so we've committed at the appropriate time probably when we get close to construction to report against the tin code. The tin code is quite a mature ESG reporting tool that has governed the tin industry for a long time. Because so many of tin sources come from complicated or complex sources within Southeast Asia, Africa and South America, the reporting for tin projects is actually quite advanced. The tin code now correlates and is recognised for a number of the major ESG reporting tools, so that's our major one we report against, as well as we're making a decision on, a number of the other global ESG codes we're going to report against as well as the tin code.
Andrew Musgrave Host
Okay, Joe, and just to wrap things up, what are some of the key catalysts that investors should keep an eye out for over the next six to 12 months?
Joe David Guest
Yeah, so for us, you know, based on our two projects at the Oropesa project in Spain, we're going to continue our strong industrial partnerships. We just signed one with Atlantic Copper, which is a company owned by Freeport McMoRan, the six biggest mining company in the world. So, we'll continue to work with partners on that. We'll solidify our project financing, we'll get our permits in place, and we'll close off our offtake agreements. In addition to that, we'll continue to explore and define the Cleveland project in Tasmania to confirm it as a tin copper project but also, as we've said, confirm the prospectivity for the critical mineral suite we've recently identified.
Andrew Musgrave Host
Okay, Joe. Well, thanks for your time today. It's been great to chat, and we look forward to further updates from Elementos in the upcoming months.
Joe David Guest
Thank you very much, Andrew.
Andrew Musgrave Host
That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.