Metals X has been nonchalantly building itself as a small to mid-cap diversified mining house as opposed to a mining company, filling a void left in an Australian mining sector once dominated by diversified producers.

With a highly experienced board and management team led by mining veterans Peter "Talkie" Newton (chairman) and Peter Cook (CEO), Metals X has the pedigree, asset portfolio and balance sheet strength to continue to build on its existing base.

Unlike many others, Metals X is an old-school company. It does not go from fad to fad, nor has it chased magnetite iron ores or uranium or diversified into coal.

From understanding its assets base, the company made its decisions from strategically sound research of fundamentals of metal markets by the likes of Cook and his long-term colleague Warren Hallam, Metals X's other executive director.

Metals X first moved on tin in 2004. The metal was out of vogue, no one wanted it, its price was low and there had been no real exploration money spent on it for about 20 years.

Metals X, then called Bluestone Tin Ltd, acquired all the major high-grade hard rock tin mines in Australia.

In the 1800s, Australia was a world leader in tin and, in fact, in the mid-1800s Metals X's Mt Bischoff mine was the largest tin mine in the world.

"We could see the resurgence of tin as a metal coming and in the past 10 years we saw the price of the metal grow to levels up to seven times its lows," Cook said.

"We don't see that stopping - the real demand and consumption for tin as an essential and strategic metal kicks in with escalating wealth and a new electronic age in China."

Tin is an essential metal today, critical to everyday life.

It is in every electrical product we own, as the key conductor (solder) to make electrical contacts and join wires and circuit boards.

In recent years the resurgence has been partially driven by lead replacement of tin in the solders in the electronics industry.

"Tin is the new ‘green metal' and this current phase has been one of environmentally driven demand," Cook said.

"‘Lead-free' is the buzz term as the Western world moves to replace lead as a known toxin from entering our waterways and landfills through electronic and computer dumping. Tin is benign to humans, with no known material impacts on human health or the environment.

"While we called the resurgence of tin right, we have been a little wayward on timing and our understanding of the supply-side dynamics. Still, today, approximately 40% of mine supply of tin comes from unconventional (some may call it illegal) mining by artisanal miners in the developing world."



So will this forever depress prices? Cook says, no: "When it's gone, it's gone. There are dwindling sources of supply, limited new discoveries and some of the more mature mines are in the wind-down phase and this market will get caught short."

He believes a supply crisis is looming and higher prices are just a matter of time.

His only worry is that tin trades as a base metal on the London Metal Exchange, which is the smallest and most il-liquid of all base metal markets and for this reason is vulnerable to manipulation by hedge funds either shorting it, going long or otherwise distorting the normal supply-demand physical market.



"So its upward ride is bumpy and often rides side-saddle with general market sentiment," Cook said.

He believes this will eventually wash out and tin will be "stronger for longer"

Metals X is Australia's only significant tin producer from its 50%-owned world-class Renison mine, which it operates in joint venture with, among others, the world's largest and most vertically integrated tin producer, Yunnan Tin.

After investing heavily in exploration, mine development and plant in recent years, Metals X believes that the Renison mine is well positioned to benefit strongly from any future uptick in the tin price.

Metals X is also the 100% owner of the Wingellina nickel-cobalt project in the Musgrave Ranges of central Australia.

Metals X acquired it in 2005 and did substantial work culminating in a feasibility study in 2008. In the backdrop of a cluster of failed nickel laterite projects in Australia, Metals X has continually contended that this one is different.

"Wingellina is a limonite not a laterite and to compare the two is like comparing chalk and cheese," Hallam said.

"A limonite is very high iron, 50% Fe2O3 in the case of Wingellina, and very low in magnesium oxide, less than 2% MgO in the case of Wingellina. This makes it not only hugely different chemically from the failed laterites of Australia's eastern goldfields, but the very ore type that the HPAL (high pressure acid leach) method of processing was made for."

The new wave of limonite projects using the HPAL process seem to endorse this view.

The newly built Ambitovy project in Madagascar is the latest, along with Coral Bay in the Philippines, which appear to have had a relatively seamless technical start-up process and look to work very well. However, they are high-capital cost projects.



"Perhaps we got it wrong in our last feasibility study. We did what any good miner should do and optimised the project," Cook said.

"However, in doing so, we made the capital hurdle so high we couldn't get near it. As a junior, this is tough love. It is worth millions, possibly billions to our shareholders if the project gets up, but if it doesn't its worth only option value."

Metals X's gold division contains the CMGP at Cue in Western Australia, which has rapidly transformed over the past 12 months into a significant gold asset with a resource base of 5 million ounces and an initial reserve of 1.17Moz.

On the back of the large resource increase a definitive feasibility study was completed in January, which considered a 100,000ozpa production scenario with estimated cash costs of $A980/oz.

Metals X has previously advised it has no plans to rush into a new gold development, believing that consolidation and more efficient use of plant capacity in the region is logical and in everyone's best interest.

This may be a wise and considered view given the recent rout in the gold price, the market values and prospects of its peers in the region have been heavily diluted and consolidation now appears to be a key factor in the survival game.

The gold division also holds the Rover project near Tennant Creek in the Northern Territory.

The main project there is the Rover 1 prospect, where a virgin IOCG discovery has been drilled out and which contains approximately 1.2Moz of gold equivalence in a polymetallic copper-gold deposit, with credits also of cobalt and bismuth. Metals X is also planning a high-grade underground mine and processing operation, with an exploration decline being approved and authorised by the NT regulators in April.

The company is in a very strong financial position with a strong balance sheet containing over $80 million in cash and working capital with no debt.

"Our strength is our people, our judgement and our patience," Cook said. "We may be the tortoise against the hare for an investor but we will last the distance and will ultimately win the race."

*A version of this report, first published in the June/July 2013 edition of RESOURCESTOCKS magazine, was commissioned by Metals X