Metals X is building a diversified commodity production base and is building a mining house as opposed to a mining company, filling a void left in the Australian mining sector which was once dominated by diversified producers.

Metals X offers exposure to a portfolio of assets at various stages of development. The multi-commodity portfolio is underpinned by the world-renowned Renison tin mine on Tasmania's west coast, of which MLX owns 50%.

The holder of the other half is Yunnan Tin Parksong Australia Holdings P/L, a key holder of which is the Yunnan Tin Group, the largest and most vertically integrated tin producer in the world.

Renison is a large underground mine that has been operating for the majority of the past 50 years.

Metals X recommenced mining there in 2008 and tin production under its stewardship has been consistently increasing, culminating in four consecutive quarter-on-quarter increases in productivity during 2012 as the full expanse of this large ore system re-opened for production.

Renison is the baseline asset for Metals X, providing stable cash flow for at least the next seven years. It is a mature mine into which the company has re-invested heavily over the past four years. Underground exploration has expanded the resource base to the equivalent of 15 years of plant capacity and ongoing exploration continues to return high-grade tin intercepts, which will further expand this resource.

The mine is one of the handful of Australia's big base metals mines developed in the 1960s and still operating. As a single mine it is possibly the first of the large scale mechanised mines in Australia. It sits with the nearby Rosebery, Broken Hill, Mt Lyell, Mt Isa and Kambalda as one of the long-term surviving base metal mines in an industry which typically has smaller short-life operations.

Metals X is Australia's only tin producer from Renison and is one of the only, if not the only, Western-world tin producers. With tin as a commodity being the most valuable of all the LME-listed base metals and also being the best performing commodity this year, so far up 25% in 2013 (as of writing in mid-January). The future and impact on the fortunes of Metals X look very bright.

"With the tin project, effectively we're reaching our peak production levels, and our costs are consequently lower. The exponential upside in cash flow that we can get in response to a higher price is really important," Metals X chief executive Peter Cook said.

The tin division of Metals X also has an expansion project on the drawing boards - not a mine expansion, but effectively a whole new project built upon the re-processing of over 20 million tonnes of historic mine tailings.

This project uses the recent advances in gravity technology, oxide flotation and tin fuming to recover the majority of tin from the old tailings. Referred to as the Rentails project, it is the second-largest single tin resource in Australia next to the Renison mine and has already completed a bankable feasibility study, which concludes its viability and robustness at current prices.

"We expect to be able to bring our Central Murchison gold project (CMGP) on in the ensuing year," Cook said.

"The CMGP has a number of development options with the potential to produce up to 130,000 ounces per annum when in steady state. The initial mine life is more than 10 years; and there is lots of scope for ore extensions in the underground mine components.

"We consider the CMGP and our overall gold strategy to be a key driver of the stock during 2013 in parallel with increased cash flow from Renison."

The mining house of Metals X also has a nickel division and a gold division, with three large development-ready projects.

It was always the plan of Metals X to be a diversified miner. Its Wingellina nickel project,- the centrepiece of its Central Musgrave project over Western Australia and South Australia, just had a definitive feasibility study completed.

Initially, Metals X couldn't find gold mines to buy, but found interesting gold projects to back. So it bought controlling positions and funded companies like Westgold Resources and Aragon Resources (taken over by Westgold in 2011) with an intention of consolidating them if their projects were attractive enough in the future.

This has come to pass, with Metals X's takeover of Westgold completed in December last year, giving Metals X full ownership of CMGP. This acquisition became essential when the market turned disastrous for capital raisings.

"Now we intend to use our own internal horsepower to de-risk that project [CMGP] to bring it into production," Cook told RESOURCESTOCKS the day the project's DFS came out.

The core of the nickel division is the massive Wingellina nickel-cobalt project. It is a nickeliferous limonite project containing nearly 2Mt of contained nickel metal, 150,000t of cobalt metal and 90Mt of Fe2O3. It is within the top 10 of the largest undeveloped nickel projects in the world.

Metals X has joined with global giant Samsung to try to bring the project to production. Under the Samsung MoU, Metals X will objectively be left with a 30% free-carried interest in the project, with the giant electronics group using its reputation in technical and financial capacities to deliver the project to production.

"If this gets up it is a company-maker for the group," Cook said.

"The objective 30% free carry is like a $750 million shot in the arm for our shareholders; and on top they get a 30% interest in over 40 years of cash flow from the project.

"Based on the 2008 feasibility numbers, this is 30% of $500 million in EBITDA for 40 years after the capital investment of $2.5 billion to build the project. Samsung and Metals X are jointly completing an updated feasibility study which should be complete by the end of calendar year 2013."

Metals X's gold division contains the CMGP at Cue in Western Australia, which has transformed over the past 12 months into a significant gold asset with a resource base of 5Moz and an initial reserve of 1.17Moz. On the back of the large resource increase, a definitive feasibility study was completed in January 2013 which considered a 100,000ozpa production scenario with estimated cash costs of $A980/oz.

The gold division also holds the Rover project near Tennant Creek in the Northern Territory. The main project here 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 poly-metallic copper-gold deposit, with credits also of cobalt and bismuth.

Metals X is also planning a high-grade underground mine and processing operation with initial plans for an exploration decline in 2013.

The company is in a very strong financial position with a strong balance sheet containing over $85 million in cash and working capital with no debt.

The Metals X team and board are well-known and successful industry players. In recent times a restructure of the Metals X board has put the highly successful Peter Newton and Cook (well known in the industry as "Talkie" and "Cooky", respectively) back together in charge of the emerging mining house.

The Metals X's team seems intent to rebuild the company as Australia's newest diversified mining house from its wonderful portfolio of mineral assets.

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