Rome Resources: Tapping DRC's High-Grade Tin Potential

• Rome Resources is a company focused on tin exploration in the Democratic Republic of Congo (DRC). Its team is experienced in discovering world-class deposits.
• The company has identified two target areas for tin exploration, with plans to start drilling in mid-July.
• Tin is described as a niche metal crucial for the EV sector, computer industry, and electrification.
• The company aims to raise £4-£6 M for aggressive exploration, using diamond drilling.
• Rome Resources plans to produce an initial resource estimate by Q4/24 and potentially seek a strategic partner by the end of the year.

Why Investors Should Consider Tin

In the rapidly evolving landscape of critical minerals, tin often flies under the radar. However, this unassuming metal plays a crucial role in the technologies shaping our future. From electric vehicles to advanced computing, tin's unique properties make it indispensable in many high-tech applications. As global demand for these technologies continues to surge, the tin market presents a compelling opportunity for savvy investors.

Enter Rome Resources, a company poised to capitalise on the growing tin market through its exploration efforts in the Democratic Republic of Congo (DRC). With a team boasting decades of experience in discovering world-class deposits, Rome Resources offers investors a unique entry point into the tin sector. This article delves into the tin market, explores Rome Resources' strategy, and examines why investors should pay close attention to this emerging opportunity.

The Tin Market: Critical Metal in Short Supply

Tin might not grab headlines like copper or gold, but its importance in modern technology cannot be overstated. Klaus Eckhov, representing Rome Resources, explains the metal's significance:

"Tin is a small niche metal, but highly sought after, especially in the EV sector and the computer industry. But it's also a solder metal for anything necessary for electrification."

This niche status and limited global supply create an intriguing market dynamic. Historically, countries like Malaysia and Indonesia dominated tin production, primarily through alluvial mining. However, as Eckhov points out, "The problem here is that the grade has dropped dramatically over the years so that they'd be looking at very low grade, and that underpins the price too."

New exploration and production are crucial to meeting future demand with traditional sources facing declining grades. This supply constraint and increasing demand from high-tech industries set the stage for potential price appreciation in the tin market.

The DRC: Misunderstood Mining Jurisdiction

When many investors hear "Democratic Republic of Congo," their minds immediately jump to concerns about conflict minerals and unethical mining practices. However, Rome Resources presents a different perspective on operating in the DRC.

Eckhov, drawing on 25 years of experience in the country, states, "We never had any child labour or anything like that, but the perception is basically there because you have a lot of artisanal activity in the DRC." He explains their approach: "Usually what we do is we're actually exploring areas where nobody is working, grassroots, and start from scratch.

This strategy of focusing on unexplored areas mitigates ethical concerns and positions Rome Resources to potentially discover entirely new deposits. Furthermore, the company's long-standing presence in the DRC has allowed them to build valuable relationships and navigate the local business environment effectively.

Rome Resources: Focused Exploration Strategy

Rome Resources' approach to tin exploration in the DRC is characterised by a laser focus on identifying world-class deposits. The company has secured licenses in an area to the north of Alphamin's operations, a region known for its tin potential.

Eckhov describes their target selection process: "We knew that the granite, well, the granite which is in that location is in the northern part, and we knew that at that area, there is a flexure there which opened up the granite fluid to come to the surface on a bigger scale than on the eastern side where the Alphamin project is situated.

This geological understanding and extensive soil sampling have led Rome Resources to identify two promising target areas. The company believes these targets could potentially double the footprint of Alphamin's original discovery, underscoring the significant potential of their project.

Aggressive Exploration Plans

With its upcoming listing, Rome Resources is preparing to launch an aggressive exploration program. The company initially targeted raising £4 M but may increase this to £6 M due to strong interest. This additional funding would allow for a more intensive drilling campaign.

Eckhov outlines their plans: "We can start drilling immediately in mid-July and then should produce the first results probably middle of August." The company intends to use diamond drilling, which Eckhov notes is more suitable for their location and provides better visibility of mineralization.

The exploration program aims to drill around 14 holes in the two target areas. This data will form the basis of an initial resource estimate, which the company expects to produce in Q4 of this year. This rapid timeline from exploration to resource definition highlights the potential for quick value creation for investors.

The Path to Production: Partnerships and Development Options

While Rome Resources' primary focus is on exploration and resource definition, the company is already considering potential paths to production. Eckhov emphasises the relatively low capital requirements for tin projects compared to other metals: "The capex with infrastructure for Alphamin was around USD$140 M. You go north, and you look at Kibali, which was 20 million ounces there, that was USD$1.8 B for the infrastructure on the plant.

This lower capital intensity makes tin projects potentially more attractive for development, even at a smaller scale. However, Rome Resources is not limiting its options. The company is open to various scenarios, including selling the project at the resource stage, finding a strategic partner, or potentially advancing the project themselves with the right team in place.

Eckhov explains their flexible approach: "Based on our track record, if we can't find the buyer for the project at resource stages or PFS, once we finish that, then we will look around for a strategic partner who comes in." He notes that they're already exploring partnership opportunities and aim to have a partner in place by the end of the year.

This strategy of keeping multiple options open while moving quickly to define the resource provides investors with several potential catalysts and exit scenarios.

The Global Tin Opportunity

While Rome Resources' project in the DRC is compelling, the broader global context for tin must be considered. The metal's critical role in emerging technologies positions it well for long-term demand growth.

Tin's use in solder for electronic components makes it an essential ingredient in the global economy's ongoing digital transformation. As devices become more complex and numerous, the demand for high-quality solder increases. Additionally, tin's role in battery technology for electric vehicles adds another growth vector to its demand profile.

On the supply side, the challenges faced by traditional producers create opportunities for new entrants like Rome Resources. With many existing tin mines facing declining grades and increased production costs, new high-grade discoveries could quickly attract attention from major players in the industry.

The Investment Thesis for Rome Resources

• Experienced team with a track record of discovering world-class deposits in the DRC
• Focus on a critical metal (tin) with solid fundamentals and growing demand
• Potentially large-scale tin project in a favourable geological setting
• Aggressive exploration program with near-term catalysts (drilling results, resource estimate)
• Multiple potential paths to value creation (sale, partnership, development)
• Low-cost exploration in a jurisdiction the team knows well
• Potential for rapid advancement from exploration to the development stage

Actionable advice for investors

1. Consider Rome Resources as a high-risk, high-reward play in the critical minerals space
2. Watch for initial drilling results expected in August 2023
3. Monitor the company's progress towards its Q4 resource estimate
4. Pay attention to any announcements regarding strategic partnerships or interest from major mining companies
5. Keep an eye on the broader tin market, as positive price movements could significantly impact the project's economics

Rome Resources presents an intriguing opportunity for investors interested in the critical minerals sector. The company's focus on tin, a metal crucial to many emerging technologies, positions it well to capitalise on growing global demand. With an experienced team, a potentially large-scale project in the DRC, and an aggressive exploration program, Rome Resources offers several near-term catalysts that could drive significant value creation.

Ultimately, Rome Resources represents a speculative but potentially rewarding investment for those willing to take on the risk of early-stage mineral exploration. As the company advances its project and the global demand for tin continues to grow, Rome Resources could find itself well-positioned to play a significant role in the future of this critical metal.

The investment case for Rome Resources is underpinned by a compelling macro theme centred on tin's critical role in the global technology revolution. As the world increasingly shifts towards renewable energy, electric vehicles, and advanced computing, the demand for tin is poised for significant growth.

Tin's primary use as a solder in electronics makes it an essential component in everything from smartphones to solar panels. The ongoing rollout of 5G networks and the Internet of Things (IoT) will drive further demand growth. Additionally, tin's potential applications in next-generation batteries for electric vehicles could open up a new metal market.

On the supply side, the tin market faces significant constraints. Traditional alluvial mining operations are seeing declining grades, while ethical concerns around some artisanal mining operations further limit supply. These factors create a favourable environment for new, responsibly operated tin projects.

"Tin is a small niche metal, but highly sought after, especially in the EV sector and the computer industry. But it's also a solder metal for anything necessary in electrification.

This statement encapsulates the critical nature of tin in modern technology and hints at its potential for future growth. As the world continues its march towards electrification and digitalisation, tin's importance will likely increase, potentially driving higher prices.

For investors, this macro thematic suggests that well-positioned tin projects could see significant value appreciation in the coming years. With its experienced team and promising project in the DRC, Rome Resources offers a speculative but potentially lucrative way to gain exposure to this trend.