Aus Tin Mining has started digging in Tasmania as tin prices continue to rise
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Aus Tin Mining had to borrow an additional $1 million late last year as it faced delays at its Granville tin mine, on Tasmania’s west coast.
But the company told the market this morning that mining is now under way at its Granville.
And Aus Tin (ASX: ANW) wasn’t the only miner with a “digging has commenced” announcement this morning.
Gold miner Matsa (ASX: MAT) is also under way at its Red October project in WA’s eastern goldfields.
The market response to both announcements was subdued, as Aus Tin edged higher to 1.7 cents while Matsa was unchanged at 16 cents per share.
Shares in Aus Tin (ASX: ANW) got a boost last April when the company secured a $2.5 million line of credit from a Lind Partners investment fund.
The share price struggled for traction through most of 2018, and Aus Tin took out an additional $1 million line of credit from Lind in January to help manage costs amid delays at Granville.
The company said exploration costs are expected to reduce in the March quarter “consistent with the current program”.
And it advised the market that tin mining has commenced on the first 430-tonne block at the open-cut mine.
“Tin concentrate sales are scheduled to recommence in the March 2019 quarter with revenues to offset production costs”, Aus Tin said.
“We are delighted to have achieved this major milestone as we transition to Level 2 operations and will now move to processing this material,” CEO Peter Williams said.
“The timing couldn’t be better with the $AUD tin price nudging $30,000 a tonne — the highest levels since 2010” Williams told Stockhead.
In addition, there’s “an increasing awareness of possible applications for tin in electric vehicles”.
Williams said the company is “particularly delighted” with the grade of tin in the first block, which is of a quality usually associated with underground mines.
Matsa’s Red October mine is the latest in a series of small eastern goldfields projects in recent years.
The company has carried out a relatively successful strategy of mining small deposits and moving onto the next project.
Earlier this year, the company flagged that shareholders would be rewarded with a dividend after it booked a $5.5 million profit on its 12,700oz Red Dog gold mine.
The Red October plan is a little different though; the company has flagged a seven-month timeline for its initial drilling project, but it then wants to turn the mine into a long-term operation.
The project stems back to September 2017, when Matsa acquired a 100% interest in the previously mothballed project for $2m in cash and scrip.
Mining commenced on February 12 and Matsa expects the project to run for around seven months.
The company is hoping for a strike rate of 5.6 grams per tonne which will yield just over 10,000 ounces of gold once the seven months is up.
Projected costs have been calculated at $1,300 an ounce. With gold prices holding steady at around $1,850 an ounce, Matsa forecasts a cash surplus on the project of $4.075m.