Meridian Mining MNO Tin 2

A few weeks ago, Meridian Mining (MNO.V) released the results of a Preliminary Economic Assessment it had commissioned on its Bom Futuro tailings project in Brazil where it plans to process the tailings to recover the tin. These tailings were the result of the historic Bom Futuro tin mine, which produced almost half a billion pounds of tin and as the metallurgical processes weren’t as efficient as the current ones, these tailings still contain a lot of tin.

The maiden resource estimate confirmed an indicated resource of 3.3 million tonnes containing almost 2,100 tonnes of tin and an additional 57.9 million tonnes containing 30,500 tonnes of tin. At a current tin price of $19,850/t, the total in situ value of the tin resource in the tailings is approximately $650M.

Meridian Mining MNO Tin

The Pea was based on a processing rate of 3.8 million tonnes per year (just over 10,000 tonnes per day) which aims to produce almost 32,000 tonnes of tin over a 16 year mine life. That’s approximately 2,000 tonnes per year which is pretty decent considering the initial capex was estimated at just $28M (for a capital intensity of $14,000 per tonne of output). Using a 10% discount rate and a slightly higher tin price ($20,500/t, 3% higher than the current spot price), the tailings project boasts an after-tax NPV of $50M with an IRR of almost 40%.

A good result, and Meridian Mining could now work towards becoming a diversified metals producer as its manganese production will be expanded as well.

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The author has a small long position in Meridian Mining. Please read the disclaimer

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