Consolidated Tin Mines : 15 Jan – CSD Transitions from Explorer to Producer ASX

Microsoft Word - CSD_ASX_Acquisition of SPM Assets v6

ANNOUNCEMENT

15 January 2015

ASX/MEDIA RELEASE

Consolidated Tin Mines Limited

ABN: 57 126 634 606

Phone: +61 (7) 4032 3319

info@csdtin.com.au

Snapshot:

Current CSD Share Price: $0.045

ASX CODE: CSD

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ABOUT CSD

Consolidated Tin Mines (ASX: CSD) is a base metal producing company with a significant tin project in advanced stage DFS

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CAPITAL STRUCTURE

Current LME Tin Price: US$19,645 Copper US$5,738: Zinc US$2,048 Detailed information at www.csdtin.com.au

CSD Transitions from Explorer to Producer

Consolidated Tin Mines Ltd (CSD) is pleased to announce that at a general meeting of shareholders held on 12 January 2015, shareholders voted in favour on all resolutions relating to the acquisition of Snow Peak Mining (SPM)

Snow Peak

ARM (NQ) Pty Ltd Ralph De Lacey Beacon Minerals Geocrystal

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OBJECTIVE

22.8%

10.4%

5.8%

5.0%

2.1%

assets which include:

• 1 MTPA Mt Garnet Concentrator

• Surveyor Mine

• Mt Garnet Mine

• Maitland and Einasleigh Projects

• Baal Gammon Mineral Rights Agreement

• All Plant & equipment

To develop the tin project through to production and become a diversified producer and minimise metal price fluctuation risk

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STRATEGY

To develop and establish tin production and focus on increasing mine life and production profile by developing other tin and base metal production opportunities within the broader Mt Garnet

/Greenvale / Einasleigh region

Registered Office:

395 Lake Street,

Cairns North, QLD, 4870 Ph: +61 (0) 7 4032 3319

• All associated mining tenements and information

  Under CSD Management, the SPM assets were brought from care & maintenance into production in November 2013 and to date have extracted over 450,000 tonnes of copper and polymetallic ore and processed over 380,000 tonnes of ore producing Zinc, Copper & Lead concentrates with a Silver co-product.

  During this period, production has been ramped up to current mining and processing production rates of 35,000tonnes per month of polymetallic ore from Surveyor mine which is transported to Mt Garnet and treated through the Mt Garnet concentrator which is operating 24 hour days with current throughput of 65 tonne per hour in the polymetallic concentrator circuit, producing over 300 wet metric tonnes (wmt) a day of Zinc, Lead and Copper concentrates with a Silver co-product.

  As at 13 January 2015, over 27,000wmt of Copper, Zinc and lead concentrates have been shipped to customers in China via Townsville and over 11,000wmt of Zinc concentrate is stored and load ready in Townsville along with over 7,000wmt of concentrates stored at Mt Garnet. The Mt Garnet underground mine was brought back into production in August 2014 and over 90,000 tonnes of primarily zinc ore was extracted to December 2014. The Mt Garnet mine is now on care and maintenance for the 2014/2015 wet season with plans to

  
  

  recommence mining after the wet season. The Surveyor mine is still operating 24/7, as is the Mt Garnet concentrator with sufficient stockpiled ore to maintain continuous operations.

  These assets remain on track for FY'14 production guidance:

  • 25,000 tonnes Zinc metal

  • 2,500 tonnes Copper metal

  • 6,000 tonnes Lead metal

  • Containing +209,000 oz Payable Ag

    CSD has taken operational control of the assets with immediate effect and all SPM employees have been transitioned across to CSD as of 13 January. Operations will continue seamlessly as CSD has taken all responsibility for related operational and financial matters.

    To finalise the transaction, CSD will:

  • issue to SPM 580,000,000 fully paid ordinary CSD shares (Consideration Shares);

  • issue a convertible note to SPM for $16.5 million which will be convertible into 165,000,000 ordinary shares 12 months after the date of issue;

  • pay SPM $500,000 per calendar quarter for four quarters ($2 million in total);

  • issue 30,000,000 fully paid ordinary CSD shares to Snow Peak International Investment (SPII) as repayment of a $3 million advance payment made to Consolidated Tin as per the Heads of Agreement signed 18th April 2012 (refer ASX release 3rd May 2012).

The acquisition of these assets sees CSD transform from a junior explorer with 13 employees to an operating miner and producer with active development projects and 134 employees.

In addition, two existing agreements between SPM and Wanguo International Mining Group (Wanguo) are now assigned to CSD (refer ASX announcement 24 October 2014). These agreements represent substantial exploration projects fully funded by Wanguo:

• Regional Project: includes the Einasleigh region, and that part of the Surveyor-Balcooma region which is outside the granted Mining Leases ML 1393 and ML 30156. Wanguo will undertake a minimum of 150,000 metres of exploration drilling within three years in return for a stake in the Regional Project - earning up to a maximum 50%. CSD will enter into a 50/50 Joint Venture with Wanguo in respect of the Regional Project should Wanguo: successfully reach an additional JORC Measured Resource of 20 million tonnes at a

  
  

  minimum average grade of greater than 1% copper or greater than 10% zinc plus lead; or complete a minimum of 150,000 metres of exploration drilling.

• Near Mine Project: includes tenures located near Mt Garnet, the Maitland project, and that part of the Surveyor-Balcooma region which is inside the granted Mining Leases ML 1393 and ML 30156. Wanguo will develop or upgrade a minimum of 200,000 tonnes per year to JORC Reserve category in return for a Net Smelter Return (NSR) in respect of each separate deposit within the Near Mine Project in which a JORC Reserve is defined by Wanguo. The NSR payable will be 3% for the first one million tonnes mined and processed from each deposit, and 1.5% thereafter.

CSD Managing Director, John Banning, said "Shareholder approval of the proposed SPM assets acquisition marks another significant milestone in the CSD strategy to rapidly develop the Mt Garnet Tin Project through the acquisition of an operating and revenue generating mining business with latent processing capacity that is only 8 kilometres from the Gillian and Pinnacles tin resources that compromise the Mt Garnet Tin Project. This acquisition is the key enabler for the Company to develop its high margin cornerstone tin project. The Mt Garnet Tin project, coupled with the operating base metals assets and project pipeline and the Wanguo exploration agreements across highly prospective tenements positions CSD with a solid foundation to deliver tin production, growth and diversification."

CSD will be providing more information to the market about the producing assets acquired from SPM in coming weeks.

ENDS

For further information please contact:

John Banning Ralph De Lacey Darryl Harris Managing Director Executive Chairman Director

M: +61 448 101 507 +61 428 163 176 +61 419 908 645

john.banning@csdtin.com.au ralph.delacey@csdtin.com.au dh@csdtin.com.au W: www.csdtin.com.au

About Consolidated Tin Mines

Consolidated Tin Mines (ASX: CSD) is a base metal producing company with current production over 300 wet metric tonnes per day of Zinc, Lead and Copper concentrates with a Silver co- product. The company operates two mines, with the ore processed at Mt Garnet located approximately 180km south west of Cairns in northern Queensland. The company is also actively exploring within the highly prospective Einasleigh /Greenvale area in north Queensland through a free carry farm in agreement. The company is also a focused tin explorer and developer. Its major tin development project comprised of the Gillian and Pinnacles deposits is also located at

Mt Garnet in north Queensland. All CSD projects are located in established mining areas, in close proximity to the company's owned and operating concentrating infrastructure.

Consolidated Tin's objective is to maintain current base metal production and develop the tin project into a major low cost, open pit tin mining operation. On completion of a favourable tin project DFS in 2015, Consolidated Tin's strategy will be to develop and establish tin production and focus on increasing mine life and production profile by developing other tin and base metal production opportunities within the broader Mt Garnet /Greenvale / Einasleigh region. The company will continue to diversify its asset base to minimise metal price risk.

Figure 1: Plan of CSD's core assets following acquisition of SPM's assets