Rome Resources - Tapping Tin's Tech-Driven Potential with High-Grade Exploration

• Pathfinder Minerals is conducting a reverse takeover of Rome Resources, focusing on tin exploration in the Democratic Republic of Congo (DRC).
• The company plans to drill 16-20 core holes up to 300m depth across two prospects, with a budget of about £1.3 million.
• The project is located near Alphamin, a major high-grade tin mine, with up to 13% tin deposits.
• The company aims to complete a resource assessment by early next year, with options to continue drilling or monetise the project.
• Tin is described as a critical mineral, especially important for AI and advanced electronics, with a projected supply deficit from 2025 onwards.

Why Investors Should Consider Tin

In an era dominated by rapid technological advancements, the importance of certain minerals has become increasingly apparent. Among these, tin stands out as a critical component in developing cutting-edge technologies, particularly in the realms of artificial intelligence (AI) and advanced electronics. As the world continues to embrace digital transformation, the demand for tin is projected to surge, creating potential opportunities for savvy investors.

The Rising Importance of Tin in Modern Technology

Tin, often overlooked in favour of more glamorous metals like gold, copper or lithium, is experiencing a renaissance in the technological age. Its unique properties make it essential for producing electronic devices, particularly soldering applications. As Paul Barrett, CEO of Pathfinder Minerals, soon to be Rome Resources, explains:

"Tin is the most critical mineral impacted by the demand for AI data centres and advanced electronics."

This underscores tin's pivotal role in developing AI and other advanced technologies. The metal's importance is further emphasized by its increased use in electric vehicles, with Barrett noting that "there's three times more tin in an electric vehicle than there is in a commercial car."

The growing demand for tin in these sectors creates a significant supply-demand imbalance. Industry projections suggest a substantial deficit in tin supply from 2025 onwards, potentially reaching up to 100,000 tons annually. This projected shortfall is likely to drive prices higher, creating favourable conditions for tin mining companies and their investors.

Rome Resources: A Strategic Player in the Tin Market

Pathfinder, soon to be renamed from Rome Resources following a reverse takeover, is positioning itself as a key player in the tin mining sector. The company's focus on tin exploration in the Democratic Republic of Congo (DRC) places it in a strategic location known for high-grade tin deposits.

Rome Resources' primary project is located adjacent to a major tin mine operated by Alphamin Resources. The geological similarity between the two sites suggests significant potential for Rome Resources' land package. CEO Barrett, describes the geology of the area:

It is a very large tin granite surrounded by several stratigraphic units that have been injected with hydrothermal fluids. So you get zonation - hotter is tin, and as you come shallower, it's copper and zinc. That structure basically continues around the northern edge of the granite, which is where we are"

This geological structure is typical of high-grade tin deposits, which have the potential for additional valuable minerals such as copper. The company has already identified high-grade tin occurrences through previous drilling, with some samples showing tin grades of up to 13% - significantly higher than the global average of around 0.5%.

Interview with Chief Executive Officer, Paul Barrett

Drilling Program & Resource Assessment

Rome Resources is embarking on an ambitious drilling program to define and expand its tin resource further. The company plans to drill 16-20 core holes, each up to 300 meters in depth, across two main prospects: Kalayi and Mont Agoma. This program, budgeted at approximately £1.3 million, is expected to provide crucial data for a resource assessment. Barrett outlines the timeline for this program:

"We're going to drill 16, hopefully, closer to 20, core holes up to about 300m depth each of these across both of those prospects and that will take us through probably until October, November."

The company aims to complete this drilling program and conduct a resource assessment by early 2025. This assessment will be a critical milestone, providing investors with a clearer picture of the project's potential and informing the company's future strategy.

Strategic Flexibility & Value Creation

One of the key strengths of Rome Resources' approach is its strategic flexibility. Rather than committing to a single path forward, the company maintains multiple options to maximize shareholder value. These options include:

• Continued Exploration: Depending on the results of the initial drilling program, the company may choose to conduct further exploration to expand the resource.
• Monetization: If market conditions are favourable, Rome Resources could look to monetize the project through a sale or joint venture arrangement.
• Advanced Studies: The company might proceed with pre-feasibility or bankable feasibility studies to further de-risk the project and increase its value.

This flexible approach allows Rome Resources to adapt to changing market conditions and capitalise on opportunities as they arise. As Barrett explains:

"What I'd like to do is potentially have another project to work on, one or two maybe, before we do that. If we dispose of it, clearly then we need to be working on something else and do the same again."

The Tin Market: Supply Constraints & Price Dynamics

The global tin market is currently experiencing significant supply constraints, which are expected to continue in the coming years. Several factors contribute to this situation:

• Indonesian and Malaysian Supply Issues: These traditional tin-producing countries face challenges in maintaining their output levels.
• Myanmar Production Decline: Political instability and resource depletion have impacted tin production in Myanmar.
• Increased Demand from Technology Sectors: The rapid growth in AI, advanced computing, and electric vehicles drives unprecedented demand for tin.

These supply constraints and growing demand have led to an upward trend in tin prices. As of June 2024, tin was trading at around $35,000 per ton, a historically high level. While not at its all-time peak, the price trajectory suggests a favourable environment for tin producers. Recycling currently accounts for about a third of the global tin supply, but this is not expected to be sufficient to meet the projected demand growth. As a result, new tin mining projects, such as Rome Resources' DRC project, are likely to play a crucial role in meeting future tin demand.

The DRC Advantage: High Grades & Established Mining Culture

While often perceived as a challenging jurisdiction for mining operations, the Democratic Republic of Congo offers significant advantages for tin exploration and production. The country's geology is particularly favourable for high-grade tin deposits, as evidenced by the success of Alphamin's nearby operation.

Rome Resources benefits from its team's extensive experience in the DRC. As Barrett notes:

"The team, the Rome team, have been [in the DRC] for years and years, decades even, looking at and successfully bringing discoveries through to the market, monetizing them."

This local expertise and established relationships are crucial for navigating the DRC's complexities. Furthermore, the company's on-the-ground presence, with a permanent geologist in the country, allows for efficient project management and rapid response to opportunities or challenges.

Comparative Advantage & Growth Potential

Rome Resources' project is similar to Alphamin's operation, which has seen remarkable growth over the past five years. Barrett highlights this potential:

"Alphamin... when they were about the same size as us, when they started about 5 years ago... they're now C$1.4 billion."

While Rome Resources does not necessarily aim to replicate Alphamin's full development path, this comparison illustrates the significant value creation potential in high-grade tin projects in the DRC.

However, Rome Resources' experienced team, strategic approach, and projected supply-demand dynamics in the tin market may help mitigate some of these risks.

The Investment Thesis for Rome Resources

• High-grade tin project: Rome Resources' DRC project shows tin grades up to 13%, significantly above global averages.
• Strategic location: Adjacent to Alphamin's successful tin operation, indicating geological potential.
• Experienced team: Management has a track record of successful discoveries and monetisation in the DRC.
• Critical mineral focus: Tin is essential for AI and advanced electronics, with projected supply deficits.
• Multiple value creation options: Flexibility to continue exploration, monetise, or advance to feasibility studies.
• Near-term catalysts: The drilling program and resource assessment are expected by early 2025.
• Undervalued potential: Starting market cap of £14 million with significant growth potential.
• Macro tailwinds: Rising tin prices and increasing demand from technology sectors.

The exploration and development of tin resources are becoming increasingly critical as the world embraces advanced technologies. With its high-grade tin project in the DRC, Rome Resources offers investors an opportunity to gain exposure to this growing market. The company's strategic approach, experienced management team, and favourable supply-demand dynamics in the tin market create a compelling investment case. However, investors should know the risks associated with early-stage mining projects and the challenges of operating in the DRC. As Rome Resources progresses with its drilling program and moves towards a resource assessment, it can potentially create significant value for shareholders, particularly if the global demand for tin continues to outpace supply as projected.

The Tin Macro Thematic

The rising importance of tin in the global technology landscape represents a significant macro thematic opportunity for investors. As the world increasingly relies on advanced electronics, artificial intelligence, and clean energy technologies, the demand for tin is expected to surge. Several key factors drive this trend:

• Technological Advancements: The rapid development of AI, 5G networks, and Internet of Things (IoT) devices is increasing the need for sophisticated electronics, all requiring tin for soldering components.
• Electric Vehicle Revolution: The transition to electric vehicles boosts tin demand, as these vehicles contain significantly more tin than traditional combustion engine cars.
• Renewable Energy: The growth of solar panels and other renewable energy technologies also contributes to increased tin consumption.
• Supply Constraints: Traditional tin-producing countries face challenges in maintaining or increasing their output, leading to potential supply shortages.
• Recycling Limitations: While tin recycling contributes to supply, it cannot meet the projected demand growth.

These factors combine to create a favourable environment for tin producers and explorers. The projected supply deficit from 2025 onwards suggests that tin prices could remain elevated, benefiting companies like Rome Resources that are developing new tin projects. However, this opportunity also comes with challenges. The concentration of high-grade tin deposits in regions like the DRC introduces geopolitical and operational risks. Additionally, the cyclical nature of commodity markets means that tin prices can be volatile in the short term.

Despite these challenges, the long-term outlook for tin remains strong.