Consolidated Tin Mines Limited - ASX2013/09/30 · Registered Office: 395 Lake Street, Cairns...

Registered Office:

395 Lake Street,

Cairns North, QLD, 4870

ANNOUNCEMENT

ASX/MEDIA RELEASE

Consolidated Tin Mines Limited ABN: 57 126 634 606

Phone: +61 (7) 4032 3319

[email protected]

¹ Free On Board (FOB) includes all costs loaded on ship; including operating costs, ore and concentrate

haulage, port levy and royalties

Snapshot:

Detailed information at

www.csdtin.com.au

Key Points

Mt Garnet Tin Project

PFS returns positive

results

PFS confirms the

potential for a project

with production profile

of 1Mtpa for 9 years or

greater

PFS input parameters &

results independently

reviewed by mining

industry professionals

Project average

annual revenue of

$127.4M

Annual average

operating cash flow

after capital costs of

A$29.7M

IRR of 111% expected

Reductions in cost

base are expected

through further design

review and

optimisation

Development of

binding agreement on

processing CSD tin ore

at SPM Mt Garnet

concentrator nears

completion

On-track to develop

the Mt Garnet Tin

Project into a major

low cost open pit

mining operation

First production is

estimated for 2014

30th of September 2013

POSITIVE PRE-FEASIBILITY STUDY FOR MT GARNET TIN PROJECT

Definitive Feasibility Study Initiated

Highlights:

Positive Pre-Feasibility Study (PFS) for the Mt Garnet Tin Project

demonstrates the technical and economic viability of the project

utilising the existing Mt Garnet concentrator infrastructure

Key points of the PFS include:

o 1Mtpa open cut mine forecast to produce average 2,944t per

annum of tin in concentrate

o Minimum 9 year mine life

o NPV of A$184.1M before tax (A$110.3M after tax) at 8% discount

rate using base case tin price of A$24,000/t

o Capital payback indicated at 2 years, IRR of 111% after tax

o Highly competitive production costs of A$91.94/tonne of ore Free

On Board¹ (FOB)

o Robust combined total cost of A$13,917/t tin FOB (with by-

product revenue credits)

o Project capital cost to first production of A$76M

o Project average annual revenue expected to be A$127.4M

o Annual average operating cash flow (after capital costs, before

tax) of A$29.7M

Reductions in the capital and operating cost base expected through

further review and optimisation of processing and mine design

Diversified project commodity base lowers financial risk profile

Continued support from cornerstone investor and largest shareholder,

Snow Peak International Investment Limited

PFS completion triggers finalisation of formal agreement with Snow Peak

investors to incorporate the Mt Garnet concentrator into Consolidated

Tin’s Mt Garnet Tin Project

PFS strongly supports progression to Definitive Feasibility Study (DFS)

Consolidated Tin remains on-track to become a significant and

profitable Australian tin producer

Current CSD Share Price: $0.06

Current LME Tin Price: US$23,445

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Consolidated Tin Mines Limited ANNOUNCEMENT

ASX/MEDIA RELEASE


Australian tin exploration and development company Consolidated Tin Mines Limited (ASX: CSD)

(Consolidated Tin, the Company) is pleased to announce the positive results from its Pre-Feasibility

Study (PFS) of the Mt Garnet Tin Project in North Queensland. The PFS results confirm the potential for a

project with a production profile of 1M tpa for a period of 9 years or greater.

The Mt Garnet Tin Project PFS results are highly positive and demonstrate the project’s economic and

technical development potential.

Based on the positive outcomes of the PFS and opportunities that exist to significantly enhance the PFS

cost base via project optimisation, the Company has approved the immediate initiation of a Definitive

Feasibility Study for the Mt Garnet Project.

The PFS demonstrates a robust technical, operational and financial position for a 1Mtpa open cut

mine with the concentrator producing an estimated 2,944tpa of tin (Sn) in concentrate at 68% Sn and

234,970tpa of iron (Fe) in concentrate at 65% Fe for export, and 53,860tpa Fluorite @ 86% CaF2

(Acidspar quality achieved in metallurgical testing) in concentrate. The mine design includes the

open cut extraction of ore.

The PFS builds on a Scoping Study completed by CSD in 2010 based on a 700,000tpa open cut mine

and concentrator at Mt Garnet, producing 3,049tpa of tin in concentrate and 236,600 t pa iron in

concentrate. The mine design included open cut extraction of ore by mechanised methods and the

initial project economics from the Scoping Study indicated the potential for a financially viable

project.

The key technical and economic outcomes of the PFS are summarised Table 1 and Table 2, and

further details on the scope and methodology of the PFS are provided in this announcement.

Consolidated Tin Mines’ Chairman and Managing Director Ralph De Lacey said:

“I am extremely pleased to update the market on our prefeasibility study, which provides the critical

reassurance to progress the development of the Mt Garnet Tin Project.

The study demonstrates the economics of a robust and significant tin project. Unlike other projects, Mt

Garnet boasts existing infrastructure and near surface ore, which are the drivers of low capital and

operating costs. The PFS has confirmed that we have the opportunity to develop a substantial and

profitable tin mining project.

Another important outcome of the PFS was the identification of a number of opportunities for financial

improvement with further design optimisation of mining and processing stages, and we have our sights

clearly set on realising these opportunities through the Definitive Feasibility Study (DFS) process.

The Board has approved the initiation of the DFS for the Mt Garnet Tin Project, commencing with

Gillian, with further evaluation work to follow at Pinnacles and later at Windermere. It is anticipated

that Gillian will provide the mill feed for the first three years of mining.

Discussions are well advanced with our major shareholder, Snow Peak, to finalise a binding

agreement to ensure that full asset value is realised for all stakeholders, with the aim of achieving tin

production by end 2014”.

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Table 1: Mt Garnet Tin Project - PFS Key Outcomes*

Annual average Total for 9 years

Mining inventory / average mill throughput 0.93 Mt 8.4 Mt

Project revenue A$127.4M A$1,146.6M

Estimated operating cash flow after capital costs A$29.7M A$267.2M

Tin in concentrate production (tonnes @ 68% Sn) 2,944tpa 26,495t

Iron ore production (tonnes @ 65% Fe) 234,970tpa 2,114,732t

Fluorite production (tonnes @ 86% CaF2) 53,860tpa 484,743t

Total cost (after by-product credits) A$13,917/t tin produced

* see page 14 for a summary of assumptions used for the Mt Garnet PFS

The tin price used to evaluate the financial performance of the project was base case

A$24,000/tonne. The below tin price sensitivity table is provided for project valuation at a range of tin

prices.

Table 2: Mt Garnet Tin Project – PFS Technical and Economic Summary*

Tin Price

Parameter

A20,000/t

Base case

A$24,000/t

A$25,000/t

NPV (at 8% discount) after tax A$60.3M A$110.3M A$122.6M

IRR 52% 111% 131%

Life of Mine (LOM) Operating Margin (FOB), ore treated A$32.92/t A$45.28/t A$48.38/t

LOM cash surplus, before tax A$275.2M A$378.5M A$404.3M


At this base case economic evaluation, the project is forecast to generate an internal rate of return

(IIR) of 111%. The net present value (NPV) after tax using an 8% discount rate is $110.3 million, which

equates to $0.49 per share ($0.82 per share before tax) based on the 223.3M shares currently on issue.

If the current (26/09/13) LME spot tin price of US$22,975/tonne is used with US$/A$ exchange rate of

$0.936, this tin price of A$24,546/t increases the NPV to A$120.5M and IRR improves to 126%.

Estimated operating cash flow over the initial 9 years life of mine is A$267.2M.

The Company now considers itself well positioned to finalise the agreement with Snow Peak and

achieve a mutually beneficial arrangement to ensure full asset value is realised for both parties. This

agreement will be subject to shareholder approval at a General Meeting.

In the event the company is not able to reach agreement with Snow Peak to process tin ore at the Mt

Garnet concentrator alternative processing arrangements will need to be made.

The Definitive Feasibility Study (DFS) has now commenced.

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PRE-FEASIBILITY STUDY DETAILS

1. SCOPE

The PFS is based on a 1Mtpa open pit operation at Mt Garnet delivering ore to a 1Mtpa

conventional flotation concentrator that will remove the silica content prior to the ore being

processed with conventional tin fuming using a rotary kiln. The Mt Garnet concentrator is

expected to produce an estimated 2,944tpa of tin in concentrate at 68% Sn and 234,970tpa of

iron in concentrate at 65% Fe and 53,860tpa Fluorite @ 86% CaF2 (Acidspar quality achieved in

metallurgical testing) in concentrate.

The PFS was compiled by Prism Mining. Table 3 details all consultants that provided PFS inputs,

assumptions and preliminary results.

Table 3: Mt Garnet Tin Project PFS Contributors

SECTION CONTRIBUTORS AREA

Geology Optiro

Wire-framing evaluation & interpretation

Geological data review

Resource estimation & validation

Mining Prism Mining

o Canning International

o MineRP

o Fromble Corp

Mine design & scheduling

Blast design

Equipment selection & mine

infrastructure

Tailings Storage Facility

Metallurgy ALS AMMTEC Ltd

Burnie Research Laboratory (BRL)

CSIRO

Walk Institute

Downer EDI

Nagrom

Newcastle Institute for Energy &

Resources

CSD ( Bob Shelley)

Comminution

Ore mineralogy & liberation

Flotation

Reduction Roasting

Gravity Separation

Magnetic Separation

Economics Canning International

o MineRP

o Como Engineers

Mining OPEX/CAPEX

Processing OPEX/CAPEX

Financial Modelling

Financial Sensitivity Modelling

Processing Como Engineers

Ansac

Luhr

Flow sheet drafting

Equipment requirements

Capital & operating cost estimate

Power supply capital cost & pricing

Building costs

Labour supply & costs

Construction service companies & unit

rates

Environment Landline Consultants Baseline Environmental Studies

Environmental Management Plan

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2. MINERAL RESOURCE

CSD completed an updated Mineral Resource estimate, announced on 11 June 2013, which was

the basis for all of the mining studies and production profiles used in the PFS.

The resource wireframes incorporated all drill holes up to October 2012 and was carried out by

Optiro Pty Ltd in accordance with the 2012 JORC guidelines and code for reporting of Mineral

Resource Estimates (refer Table 4).

Table 4: Mt Garnet Tin Project JORC Resource

Mining inventory includes Measured, Indicated and minor amounts of Inferred Mineral Resources

that have had mining dilution and recovery factors applied to the mine design, creating an

TIN (Sn)

Cut-off

Sn_EQ %

Measured

tonnes

Grade

Sn%

Indicated

tonnes

Grade

Sn%

Inferred

tonnes

Grade

Sn% Total tonnes

Grade

Sn%

Gillian 0.2 1,105,000 0.73 1,563,000 0.62 930,000 0.61 3,599,000 0.65

Pinnacles 0.33 - - 5,461,000 0.30 1,575,000 0.30 7,035,000 0.30

Deadmans Gully 0.18 - - 444,000 0.34 - - 444,000 0.34

Windermere 0.25 - - 829,000 0.26 1,211,000 0.27 2,040,000 0.27

TOTAL 1,105,000 0.73 8,296,000 0.36 3,716,000 0.37 13,118,000 0.39

IRON (Fe)

Cut-off

Sn_EQ %

Measured

tonnes

Grade

Fe%

Indicated

tonnes

Grade

Fe%

Inferred

tonnes

Grade

Fe% Total tonnes

Grade

Fe%

Gillian 0.2 1,105,000 32.32 1,563,000 24.50 930,000 28.53 3,599,000 27.95

Pinnacles 0.33 - - 5,461,000 19.12 1,575,000 21.04 7,035,000 19.55

Deadmans Gully 0.18 - - 444,000 26.70 - 0.00 444,000 26.70

Windermere 0.25 - - 829,000 25.79 1,211,000 23.68 2,040,000 24.54

TOTAL 1,105,000 32.32 8,296,000 21.21 3,716,000 23.78 13,118,000 22.87

FLUORINE (F)

Cut-off

Sn_EQ %

Measured

tonnes

Grade

F%

Indicated

tonnes

Grade

F%

Inferred

tonnes

Grade

F% Total tonnes

Grade

F%

Pinnacles 0.33 - - 5,461,000 6.28 1,575,000 4.14 7,035,000 5.80

TOTAL - - 5,461,000 6.28 1,575,000 4.14 7,035,000 5.80

TIN EQUIVALENT

(Sn_EQ)

Cut-off

Sn_EQ %

Measured

tonnes

Grade

Sn_EQ

%

Indicated

tonnes

Grade

Sn_EQ

%

Inferred

tonnes

Grade

Sn_EQ

% Total tonnes

Grade

Sn_EQ

%

Gillian 0.2 1,105,000 0.91 1,563,000 0.75 930,000 0.77 3,599,000 0.81

Pinnacles 0.33 - - 5,461,000 0.50 1,575,000 0.47 7,035,000 0.49

Deadmans Gully 0.18 - - 444,000 0.49 - 0.00 444,000 0.49

Windermere 0.25 - - 829,000 0.40 1,211,000 0.41 2,040,000 0.41

TOTAL 1,105,000 0.91 8,296,000 0.54 3,716,000 0.53 13,118,000 0.56

Sn equiv alent is based on the following Formula, product pricing and metallurgical recov eries;

(Sn%)+(Fe%*0.75*(150/20,000))+(F%*0.7*(400/20,000))

Sn = AU$ 20,000/tonne,

Fe = 75% recov ery @ AU$ 150/tonne

F = 70% recov ery @ AU$ 400/tonne

REC = Recov ery

Sn%+(Fe%*FeREC*Fe$/t/Sn$/t)+(F%*FREC*F$/t/Sn$/t)For

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inventory of potential ore and development tonnes. The current design anticipates the extraction

of 8.4 Mt of ore for processing over the initial mine life.

PFS mine design was based on more conservative recovery assumptions than test results

indicated. This leaves potential for an increase to the mining inventory and mine life extension.

Gillian and Pinnacles mining inventory contains 12% and 5% Inferred Mineral Resources

respectively.

There is a lower level of geological confidence associated with inferred mineral resources, and

there is no certainty that further exploration work will result in the determination of indicated

mineral resources or that the production target itself will be realised.

3. INFRASTRUCTURE

The project site is well-positioned relative to major infrastructure. Access is by National Highway

One (Kennedy Highway) that runs through the project area (refer Figure 1: Key Project Map). The

Mt Garnet Concentrator is adjacent to this highway and centrally located 9 kms east and west

from the Gillian and Pinnacles resources respectively.

Figure 1: Key Project Map

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Port facilities at Mourilyan and Townsville are located 145km and 450km respectively from the Mt

Garnet Concentrator via all-weather highway.

Power will be obtained from the local power grid. Power allocation and a transformer sub-station

are already established at the project site.

The project is serviced by the township of Mt Garnet with primary school, police station, fuel and

general provisions available, plus an established workforce now operating the Snow Peak owned

concentrator. A regional hospital is located in Atherton with Cairns Base hospital within one hour

flight.

4. MINING METHOD

Prism Mining was commissioned by CSD to undertake the mining studies associated with the Mt

Garnet PFS. Mining method will be by open cut with an average mining cost per tonne of

A$24.25/t. Pit designs were based on Whittle optimisation shells generated using preliminary

operating cost estimates. Mine development and operation is reflected as contractor mining in

the PFS.

Ore will be transported to the Mt Garnet concentrator subject to final agreement with Snow Peak.

5. MINERAL PROCESSING

Extensive metallurgical test programs have been completed to date by ALS AMMTEC Ltd, Burnie

Research Laboratory (BRL), CSIRO, Walk Institute, Downer EDI, Nagrom and Newcastle Institute for

Energy & Resources (NIER) led by CSD Senior Metallurgist Mr Bob Shelley. These programs have

confirmed the metallurgical recovery characteristics of the Mt Garnet ore.

The Company commissioned Como Engineering to complete the mineral processing component

of the PFS, including capital estimates for the reconfiguration of the Mt Garnet concentrator.

The essential elements of the process plant design include the following primary comminution and

flotation stages:

Multi-stage crushing

Primary grinding using the existing SAG mill and ball mills with one additional ball mill added

from existing grind circuit

Reverse Silica flotation through a series of conventional flotation cells with rougher and

cleaner cells with additional primary cells added

The combined high iron concentrate material containing tin will report to final filter where moisture

is extracted prior to being pelletised and fed to the tin roasting circuit.

Tin fume at 68% Sn will be recovered through a gas handling system consisting of gas cooling,

followed by a series of filters (Bag House) with continuous recovery of SnO2 as a solid prill for

dispatch to smelters. Final gas cleaning and lime scrubbing will ensure release of clean air to the

atmosphere.

Magnetite will be continuously recovered from the rotary kiln discharge where it will be cooled

and conveyed to the magnetite stockpile for dispatch to port.

Process water is available from water bores and an existing external water supply dam.

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The process tails will be transferred to a tailings thickener to facilitate water conservation followed

by deposition in a tailings storage facility. Tailings water will be reused in the process.

Various conventional flotation and flocculent chemical additives will be used in the process.

Figure 2: Simplified Process Flowsheet

It is intended that, with the addition of tin processing equipment, Consolidated Tin’s ore from the

Mt Garnet Project will be processed at the existing Snow Peak Mt Garnet concentrator. CSD and

SPM are working cooperatively to finalise agreement on the utilisation of the concentrator and a

binding agreement is expected Q4 2013.

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6. FINANCIAL EVALUATION

6.1. Capital Expenditure

Capital and operating costs defined in the PFS are competitive when compared to other tin

development projects. The upfront capital estimates for the Mt Garnet project are significantly

reduced through the use of an existing and established processing facility.

Total capital estimated to first production for the Mt Garnet Project is A$76M.

Table 5: Mt Garnet Tin Project Capital Estimate to First Production*

Capital Expenditure Breakdown A$M Cost Estimates

Mine Infrastructure 1.8

Existing plant reconfiguration 32.1

Roasting / Tin fuming 40.6

Tenure & Environmental 1.5

TOTAL 76


Prism Mining and Como Engineers have developed the project capital cost estimate in

Australian dollars (A$). Accuracy of the mining capital estimate is ± 20% and processing

capital estimate is ± 25% for Gillian and ± 35% for Pinnacles.

Prism based their mining capital and operating cost estimates on current costs for Australian

mining contractors.

The processing plant capital estimate has been prepared by Como based on quotes for key

equipment and current known equipment prices, and fabrication and construction rates at

the time of the study.

The Tailings Storage Facility (TSF) capital cost provided by Prism is based on the construction of

an engineered dam to create a minimum five year storage capacity. Construction costs are

based on rates for earthworks from local contractors. This tailings facility will be used

throughout the project with subsequent engineered dam lifts as required.

The project will utilise the existing administration and mine offices, laboratory, and personnel

facilities now owned by Snow Peak Mining.

6.2. Operations Costs

Estimated average annual operating costs is $91.94/t FOB as outlined in Table 6.

The key components of the operating cost estimate include:

Open cut mining by contractor

Operations management, technical and supervisory workforce developed by CSD

Power supply from the national grid

Repairs, maintenance spares and consumables allowances

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The proximity to key infrastructure facilities of power, water and all-weather roads provides the

Mt Garnet Project a significant advantage above similar development projects.

Table 6: Mt Garnet Tin Project Operating Cost Estimates FOB

Operating Expenditure Breakdown A$/t ore

Mining Cost (Inc Overheads) 24.25

Processing Cost (Inc Overheads) 49.59

Cost of Sales 4.12

Ore Haulage/Concentrate Freight Cost 13.98

FOB Total Operating Cost 91.94


The operating cost estimates are presented in A$ and are based on information provided by

Prism for consumables, energy and local labour rates. The order of accuracy of the operating

cost estimate is ± 20%.

6.3. Sensitivity Analysis and Payback –tin price A$24,000/t, exchange rate A$0.95c/US$1.00

OPEX = 91.94/t, CAPEX = 76M

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Sensitivity Table

Option IRR % NPV @8% NPV @10% NPV @12%

Sales Price (-10%) 55% $ 56,643 $ 49,369 $ 43,068

Sales Price (-5%) 80% $ 83,578 $ 73,803 $ 65,319

Sales Price Base 111% $110,292 $98,053 $87,416

Sales Price (5%) 150% $ 136,589 $ 121,957 $ 109,224

Sales Price (10%) 199% $ 162,887 $ 145,861 $ 131,032

Mining Costs (-10%) 123% $ 119,510 $ 106,417 $ 95,033

Mining Costs (-5%) 117% $ 114,901 $ 102,235 $ 91,225

Mining Costs Base 111% $110,292 $98,053 $87,416

Mining Costs (5%) 105% $ 105,682 $ 93,871 $ 83,608

Mining Costs (10%) 100% $ 101,006 $ 89,633 $ 79,752

Procesing Costs (-10%) 132% $ 128,622 $ 114,572 $ 102,360

Procesing Costs (-5%) 121% $ 119,457 $ 106,312 $ 94,888

Procesing Costs Base 111% $110,292 $98,053 $87,416

Procesing Costs (5%) 102% $ 101,043 $ 89,725 $ 79,886

Procesing Costs (10%) 92% $ 91,573 $ 81,211 $ 72,202

Transport to Port (-10%) 116% $ 113,922 $ 101,343 $ 90,408

Transport to Port (-5%) 113% $ 112,107 $ 99,698 $ 88,912

Transport to Port Base 111% $110,292 $98,053 $87,416

Transport to Port (5%) 109% $ 108,476 $ 96,408 $ 85,920

Transport to Port (10%) 107% $ 106,661 $ 94,764 $ 84,424

Transport to Plant (-10%) 112% $ 111,871 $ 99,468 $ 88,688

Transport to Plant (-5%) 112% $ 111,081 $ 98,760 $ 88,052

Transport to the Plant Base 111% $110,292 $98,053 $87,416

Transport to Plant (5%) 110% $ 109,502 $ 97,346 $ 86,780

Transport to Plant (10%) 110% $ 108,712 $ 96,639 $ 86,145

CAPEX (-25% Gillian, -30% Pinnacles) 262% $ 128,295 $ 115,472 $ 104,263

CAPEX Base (0%) 111% $110,292 $98,053 $87,416

CAPEX (+25% Gillian, +30% Pinnacles) 63% $ 92,133 $ 80,504 $ 70,461

Exchange rate (0.85) 217% $ 170,733 $ 152,989 $ 137,531

Exchange rate (0.90) 153% $ 138,834 $ 123,995 $ 111,082

Exchange Rate Base (0.95) 111% $110,292 $98,053 $87,416

Exchange rate (1.00) 81% $ 84,203 $ 74,372 $ 65,838

Exchange rate (1.05) 58% $ 60,398 $ 52,779 $ 46,176

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Payback Table

7. ENVIRONMENT

Landline Consultants have conducted requisite baseline studies with the mining project

Environmental Management Plan nearing completion. During the course of these studies no

endangered species or local water quality risks have been identified. Current testing indicates no

damaging or harmful materials in the mined and processed material.

The processing facility is currently established with Environmental Authority and mandatory

Environmental Financial Assurance in place for existing processing activities.

The Mt Garnet region is a historical mining and processing area with significant legacy

disturbance.

8. COMMUNITY

The mining project is located in close proximity to the township of Mt Garnet which was founded

on mining in the late 19th century. Mining continues in the immediate and wider Herberton Tin

Field area to the present day. Other townships close to the project are Ravenshoe, Atherton,

Herberton, Mareeba and Cairns.

The community continues to support the mining industry. It is expected that the majority of

required personnel will be sourced locally. The community in the vicinity of the project will benefit

from increased employment opportunities and the economic flow on from the provision of goods

and services to the project.

0 0 0

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

6 6 6

7 7 7

8 8 8

9 9 9

$90,166

$104,969

$110,292

$12,191

$32,618

$46,252

$60,809

$78,266

Project Net Present Value @ 8%

Year Present Value ($ AUD '000)

$0

-$31,524



$0

-$30,388

$10,986

$29,967

$42,406

$55,445

$70,798

$81,073

$93,623

$98,053



$0

-$29,312

$9,884

$27,546

$38,913

$50,616

$64,150

$73,045

$83,716

$87,416

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9. ASSUMPTIONS

CSD has researched tin and iron ore markets as well as reviewed broker consensus for both the

respective commodities and the forecast US$:AU$ exchange rate. For the purpose of the Mt

Garnet PFS, CSD applied what is considered to be a realistic base case view of the future

commodity price assumptions.

Tin price: A$24,000 per tonne

Iron ore price: A$150 per tonne

Fluorine price: A$400 per tonne

US$/A$ exchange rate: $0.95

This initial market review indicates that the concentrates can realistically be sold for the values

used in the calculation at the present time.

Mining inventory includes Inferred and Indicated Mineral Resources that have had mining dilution

and recovery factors applied to the mine design creating an inventory of potential

developmental tonnes of 8.4M.

The key assumptions for the cost estimate are:

Mine development by contractor mining employing local skilled and semi-skilled

personnel

Company mine development/management support team

Utilising current Snow Peak equipment and facilities where possible

Finalising agreement with Snow Peak as a priority

Based on purchase of all new equipment

10. OPPORTUNITIES

A range of specific opportunities to optimise the project and enhance financial performance

have been identified for evaluation during the DFS:

Operating mining cost can be reduced significantly with mine design optimisation through

completing geotechnical drilling and evaluation to optimise mine design and reduce strip

ratios. This work is planned to commence in October 2013

Potential development of partnership with a boutique offshore iron smelter to incorporate

tin fuming, leading to reductions in CAPEX and OPEX without a material increase in freight

cost

The current market downturn creates opportunity for significant savings on capital

equipment and operating consumables

Company strategy is to continue exploration of other known mineralisation in the current

tenement holding to confirm additional Resources to increase mine life

Potential improvement to recovery of more contained tin metal in the current mining

inventory of 44,000t

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11. RISKS

A number of key risks have been identified, which the company will continue to review and

manage accordingly. The risk identified may impact (either positively or negatively) on the

economics of the Mt Garnet Tin Project development.

These risks include, but not limited to:

Commodity price and foreign currency exchanges rates

Capital and operating costs

Processing optimisation and recoveries

Project financing terms

ENDS

For further information please contact:

Ralph De Lacey Darryl Harris

Managing Director Director

M: +61 428 163 176 M: +61 419 908 645

E: [email protected] E: [email protected]

W: www.csdtin.com.au

About Consolidated Tin Mines

Consolidated Tin Mines is an emerging ASX-listed (ASX: CSD) tin explorer and developer. Its major

project is the Mt Garnet Tin Project near Cairns in northern Queensland. The project is located in an

established mining area, close to infrastructure. Consolidated Tin’s objective is to develop the project

into a major low cost, open pit tin mining operation. The Company’s strategy is to confirm an initial

Resource base of 8Mt-10Mt of tin ore from its three deposits, to feed a proposed centralised mill and

process about 1Mt per annum to produce about 5,000 tonnes of tin per annum.

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mailto:[email protected]

mailto:[email protected]

http://www.csdtin.com.au/

16


ASX/MEDIA RELEASE


Competent Persons Statements

The information in this announcement that relates to Mineral Resource is based on information compiled by Mr

Michael Andrew, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy.

Mr Andrew is a Principal of Optiro Pty Ltd and has sufficient experience that is relevant to the style of

mineralisation and type of deposit under consideration and to the activity currently being undertaken to

qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore Reserves’. Mr Andrew consents to the inclusion in this

announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Processing Engineering Capital and Operating Estimates is

based on information reviewed by Mr Alisdair Finnie (B.Sc., Grad Dip. Min Sc, MAusIMM). Mr Finnie is Processing

Engineering Manager of Como Engineers and has 15 years of relevant experience in these areas of work. Mr

Finnie consents to the inclusion in this announcement of the matters based on information provided by him

and in the form and context in which it appears.

The information in this announcement that relates to mine design, mine costing, and capital costs for mining is

based on information reviewed by Mr Richar Guerra, a Competent Person who is a Member of the Australasian

Institute of Mining and Metallurgy. Mr Guerra is a consultant working for Mine RP Ltd and was engaged by Prism

Mining Pty Ltd to prepare the mine design, mine costing and mining costs for Consolidated Tin Mines Limited

PFS report. Mr Guerra has sufficient experience that is relevant to the style of mineralisation and type of deposit

under consideration and to the activity currently being undertaken to qualify as a Competent Person as

defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources

and Ore Reserves’. Mr Guerra consents to the inclusion in this announcement of the matters based on his

information in the form and context in which it appears.

Forward-Looking Statements

Certain statements made in this announcement, including, without limitation, those concerning the pre-

feasibility study, contain or comprise certain forward-looking statements regarding Consolidated Tin Mines

Limited’s (CSD) exploration operations, economic performance and financial condition. Although CSD

believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can

be given that such expectations will prove to have been correct. Accordingly, results could differ materially

from those set out in the forward-looking statements as a result of, among other factors, changes in economic

and market conditions, success of business and operating initiatives, changes in the regulatory environment

and other government actions, fluctuations in metals prices and exchange rates and business and operational

risk management. CSD undertakes no obligation to update publicly or release any revisions to these forward-

looking statements to reflect events or circumstances after today's date or to reflect the occurrence of

unanticipated events.

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Consolidated Tin Mines Limited - ASX2013/09/30 · Registered Office: 395 Lake Street, Cairns...

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