One of only two American tin deposits deemed by the USGS in 2017 as likely to be economic has been acquired by Noronex (ASX: NRX), with the Sleitat project hosting high-grade assays that are wide and open along strike and at depth – such as 29.1m at 1.56% Sn and 28g/t Ag from 20.4m including 3.1m at 12.55% Sn and 198g/t Ag from 20.4m, alongside prior metallurgical studies demonstrating 83% recovery rates. It has the right characteristics and sits in the perfect geological setting for a large scale tin deposit, and was previously estimated by the US Bureau of Mines to contain an inferred resource of 25.9Mt grading between 0.224% and 0.37% Sn, along with 0.04% W and 17g/t Ag. This compares to highly relevant peer comparison $213 million Sky Metals (ASX: SKY) and its Tallebung project in NSW, which contains a deposit grading 32.7Mt at 0.11% Sn, 0.035% WO3 and 9.5g/t Ag (0.16% SnEq). At an insanely cheap $7.7 million market cap, NRX is dealing with a much higher grade deposit that is potentially a couple of precisely planned drill programs from confirming its scale – and its valuation is not at all representative of this incredible opportunity. There is a JORC exploration target coming this August, along with fieldwork and geophysics that will lead into NRX’s maiden drilling campaign, all of which should close the disparity between NRX’s $80-$133/t valuation and the $5,788/t SKY is currently priced at. The midpoint of Sleitat’s historical resource infers 77,111t of contained tin at 0.297% Sn – virtually double the grade and twice the contained tin of SKY’s 0.16% SnEq, 36.8kt tin resource. This is before assessing the potential impact of Sleitat’s tungsten and silver, which at the current prices of US$3,125/mtu (US$394k/t) and US$58/oz respectively, could push Sleitat’s midpoint resource grade to 0.66% SnEq – equating to US$343/t of in-situ value for a resource that begins from surface and would host US$8.9 billion in contained metal.
Tin is a tremendously exciting metal that cracked US$59,040/t for the first time in January and still trades around US$52k/t at spot – up from just over US$30k/t a year ago. Macquarie estimates it was in a 20.5kt deficit last year which will grow to 21.1kt this year. Its market possesses many of the same factors we sought out in antimony and tungsten – including no domestic mining in the US, a highly unstable supply that is dominated by high risk countries, namely China, Myanmar, the DRC and Indonesia, while virtually every single blockbuster thematic is dependent on tin for solder, including AI, semiconductors, data centres, electronics, electrification, EVs and renewable energy. NRX’s project is located in Alaska, ranked third best mining jurisdiction in the world by the Fraser Institute’s 2024 survey, where it could serve as a far more ideal source for the US$65 million tin smelting facility currently under construction in America, which was partially funded with a US$19 million grant from the US Department of War and is planning on sourcing concentrate from Rwanda.
We see a litany of exciting similarities between this deal and when American Tungsten & Antimony (ASX: AT4) acquired its Antimony Canyon project, and we first initiated coverage on AT4 when it was trading at $0.031 with a $25 million market cap, before it went on to reach $280 million at $0.23/share. Some of the key catalysts that drove this rise were the release of a JORC exploration target and high-grade channel samples, after the project acquisition and in the lead up into drilling, all while antimony traded near all time highs – which are the exact same news events that NRX has on the horizon, all being conducted in the same attractive tin price environment.
NRX also has three advanced copper projects that have collectively undergone 180,000m of drilling, two of which are currently the subject of a $20 million earn-in with $20.4 billion market cap South32 (ASX: S32) – of which the mining giant has already funded $5.8 million in exploration expenditure as it works towards earning 60% of the assets. While we are focused on the tin project, we’ll cover the important results from these campaigns which have potential to yield major discoveries from a total tenement package of 10,398km2, and with prior hits of 45m at 0.80% Cu and 23g/t Ag from 144m, including 13m at 1.50% Cu and 45g/t Ag from 150m. There is also a Canadian deposit with 1.63Mt at 1.6% Cu, 0.66g/t Au and 39.7g/t Ag that has recorded historical intercepts including 5.0m at 6.0% Cu, 1.5g/t Au and 154g/t Ag from 96m.
The acquisition of Sleitat is a brilliantly asymmetrical opportunity that very rarely presents itself in small cap explorers, where a commodity is near all time highs and a company is able to acquire a high quality project while remaining at a ridiculously low valuation. This is likely a narrow window that will close swiftly, with Sleitat exhibiting highly attractive factors that at face value supersede SKY’s deposit, albeit with further drilling required to establish a JORC-level degree of certainty.
Sleitat has a slew of further standout assays aside from the headline hole that drilled right through the high-grade core, such as 47.9m at 0.40% Sn including 9.45m at 2.99% Sn, 124g/t Ag from 3m, 19.8m at 0.71% Sn from 3m, 23.47m at 0.36% Sn from 36.6m and 6.1m at 0.8% Sn and 25g/t Ag from surface. The project is divided into the 900m x 300m North Greisen, where all the previous drilling has taken place, and the 400m x 250m Southern Greisen, which also has attractive levels of surface tin and similar geophysical signatures. The historical resource is prime for a modern confirmatory and extensional drilling campaign, with the methodology of its estimation revolving around the mapped surface area of greisen zones, a 152m depth projection, a tonnage factor of 12ft3/st (2.67t/m3), and a mineralised greisen proportion of 48.6% of total rock derived from 650 samples.
The steep greisen sheets at Sleitat remain open below the maximum drilled depth of 107m, and mineralisation could plausibly continue far past the 152m projection from the historical resource, with some of the deeper intercepts from Sleitat including 22.59m at 0.28% Sn and 22g/t Ag from 75.41m, 4.88m at 0.3% Sn and 125g/t Ag from 95.1m, as well as 2.74m at 0.25% Sn, 23g/t Ag and 0.1183% W from 86.87m. Another peer comparison certainly worth examining is $106 million market cap First Tin (LSE: 1SN) and its flagship Taronga project in NSW, which recently had an MRE upgrade to reach 132Mt at 0.10% Sn at a 0.05% Sn cut-off grade in the lead up to an updated DFS. Taronga is another granite-related, subvertical sheeted cassiterite system, and its mineralisation extends to around 550m below surface.
Sleitat’s drill core is housed at the Alaska Geological Materials Center, a government facility that NRX visited last month to observe the cassiterite-bearing greisen mineralisation and confirm historical grades with the XRF gun. There could be further upside in reassaying the old drill core due to the potential for it to host other minerals, including but not limited to gallium, rubidium, lithium and REEs – and NRX will soon send them to the lab. 1SN’s Taronga deposit also contains very low grade copper and silver at 0.05% Cu and 2.8g/t Ag that is expected to contribute to the project economics due to the proposed processing route producing sulphide residues that are upgraded to levels of 137g/t Ag and 1.74% Cu.
Modern metallurgical testwork will be required to confirm the historical results – but they are certainly encouraging with a recovery rate of 83% from ore that initially graded 0.65% Sn and 19g/t Ag, which produced a high-grade concentrate above 60% Sn and was highly amenable to gravity processing, with excellent potential for Heavy Media Separation being noted in the 1984 study. A variety of geophysical surveys have been conducted as well between 1983 and 2004, including four lines of IP, two magnetic surveys, VLF-EM and radiometric surveys.
NRX has acquired an expanded project tenure of 33 State of Alaska claims covering roughly 2,137 hectares (5,280 acres), up from 22 state claims covering about 1,425 hectares at the time of the 2015 NI 43-101 report. The acquisition terms are relatively attractive in the short term with just $415k in cash and $1.05 million in shares due upfront, with further payments baked into time and key milestones surrounding MRE targets up to 50Mt at 0.3% Sn and decisions to mine that cumulatively add up to $1.075 million in cash and $1 million in shares, along with a 3% NSR.
The west-looking cross section below shows some of the high-grade tin intercepts at Sleitat, which are open along strike either side and at depth – providing NRX with an excellent near term opportunity to drill out these higher confidence extensions:
Source: NRX
The distribution of the project’s 14 diamond drill holes at the project can be seen below, which were all confined to the Northern greisen and produced spectacular results – while the completely untested but highly prospective Southern greisen can also be seen. There have also been intercepts that demonstrated mineralisation within the two mica granite, having recorded 6.1m at 0.8% Sn and 25g/t Ag from surface, 2.23m at 0.25% Sn and 12g/t Ag from 13.84m, as well as 3.35m at 0.71% Sn and 47g/t Ag from 26.91m:
Source: NRX
The comparison table below highlights the insane disparity between NRX and its relevant peers on a contained tin basis as well as grade, with the difference ripe for narrowing as the company builds up a dataset that qualifies as a JORC resource:
Tin is Ripe for Demand Shock and Supply Disruption
The International Tin Association has forecast global tin consumption to rise from 357kt in 2023 to 428kt by 2030, with 382kt estimated to have been reached in 2025 and 52% of it currently consumed by solder, which plays right into the modern critical industries of AI hardware, solar power, EVs, robotics and electrification. There is also next-gen tin-based perovskite solar cell technology currently being researched, which would significantly boost demand if it is successfully commercialised. The solar power industry is highly nimble and can respond quickly to new technology, which was demonstrated by the rapid uptake of antimony by the China-dominated solar panel industry, after its added efficiencies to photovoltaics saw its consumption grow from 16kt in 2021 to 50kt in 2023, becoming the largest use of antimony.
The supply mechanics are extremely vulnerable and have repeatedly triggered price shocks when disruptions occur, with Myanmar’s Man Maw mine – which previously represented 7-8% of global supply – attempting to resume production after being shuttered for years with issues such as flooded mine shafts and rising cost pressures that operators are unable to accommodate. There’s also the DRC’s Bisie mine – which produces 6% of global tin supply – having to close for a period last year after almost being overrun by Rwandan-backed rebels. Indonesia’s tin industry faces a litany of problems and is currently subject to difficult export restrictions that are curbing significant amounts of output.
Even without China introducing export restrictions on tin – which would completely break the market – as it did with antimony, tungsten and rare earths, the outlook for supply security is stark, and the US has learned the hard way what happens when its multi-trillion dollar industries fall victim to the multi-billion dollar critical minerals markets they depend on. Tin is officially on the US Government’s list of critical minerals, and domestic production is a crucial element of securing supply.
The combination of these factors has led the market to forecast future structural scarcity, with traders spurring on elevated prices with the view of continued disruption being on the horizon in the face of rising demand. Speculation is running rife as traders pile into the action, with an average of 345k contracts traded daily on the Shanghai tin futures market in May – which is the equivalent of total annual global tin consumption. It exploded to the equivalent of over 1Mt of refined tin during one day in January – almost triple yearly production – as it was headed for US$59k/t, despite the state-backed China Nonferrous Metals Industry Association precariously advising against the trade.
Interestingly, LME tin stocks actually rose sharply during April and May – right when the commodity was again nearing peak pricing, which occurred despite there being no imminent supply shortage, with LME time-spreads also indicating no near-term shortage. The divergence suggests that the elevated outright price was being driven more by speculative positioning and expectations of medium-term structural supply constraints, and less by present physical tightness.
The levels and origins of China’s tin concentrate imports can be seen below, with the two principal sources being from conflict zones subject to regular supply disruptions in the DRC and Myanmar. Imports have bounced back off the lows of the past two years, but concentrate supply from Myanmar is still far below pre-disruption levels:
Source: Reuters, Andy Home
The chart below shows the LME three-month tin price along with the cash to 3 month time-spread, which remained in mild and relatively stable contango even as the spot tin price surged toward record levels:
Source: Reuters, Andy Home
The chart below depicts forecast growth in tin consumption with 5G, EVs and solar split out – which is still highly leveraged to new technologies that could drastically increase tin’s demand profile:
Source: ITA
NRX is too good of an opportunity to pass up at the current valuation, with such significant upside that could be achieved by validating the historical resource and a lot to fall back on even if it does not confirm considerable scale. A solid 6 months of catalysts stacked up will keep the market engaged with the project during a time of heightened interest in tin, which is based on solid fundamentals that should see a prolonged strong pricing environment – which is the perfect breeding ground for the company to rerate as it explores one of the USA’s most prospective tin assets.
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Disclaimer: This article is for informational and marketing purposes only, and does not constitute financial advice or a recommendation to invest. All opinions expressed are our own. We may receive fees or other forms of compensation in connection with the publication of this content, and may own shares in any of the mentioned companies. Please do your own research and seek professional advice before making any investment decisions.