The Search for High-Grade Tin Assets in the Surging Tech & Green Energy Demand

• Tin demand is projected to double over the next 20 years, driven by growth in electronics, AI, solar energy, and electric vehicles.
• Tin faces near-term supply disruptions from mine shutdowns in Myanmar and potential export restrictions in Indonesia, the world's largest exporter.
• The tin market has a lack of new mine supply in development, with reserves concentrated in a few countries, leading to a structural deficit.
• Rome Resources is advancing two high-grade tin projects in the DRC, with drill results expected imminently and a proven management track record.
• Tin remains an overlooked critical metal that is essential for future technologies and the green energy transition, presenting a compelling investment case.

Tin, a metal often overlooked in discussions of the green energy transition, is poised to play a crucial role in the coming decades. As the world rapidly shifts towards advanced technologies, renewable energy, and electrification, tin is emerging as a critical component of this global transformation. With demand projected to outpace supply, tin presents a compelling investment opportunity for those seeking exposure to the materials powering our technological future.

Tin's Critical Role in Future Technologies

Over 50% of global tin consumption is now used in soldering for circuit boards and electronic components, making it a direct play on the exponential growth of electric vehicles, 5G smartphones, Internet of Things (IoT) devices, and data centers. Tin demand is expected to be buoyed by the rapid adoption of electric vehicles, which require substantially more semiconductor content and circuit board soldering than traditional combustion engine cars.

The 5G rollout and growth of internet-connected devices is also a boon for tin soldering demand. 5G phones have 30-40% more semiconductor content than 4G devices, while the global IoT market is forecast to expand at an 11% compound annual growth rate (CAGR) to reach $1.3 trillion by 2026.

Data centers and cloud computing infrastructure are another fast-growing source of tin demand, with the global data center market projected to grow at a 13.7% CAGR from 2022-2030. The buildup of artificial intelligence (AI) computing capacity and machine learning training centers will further bolster tin consumption in the coming years.

Andy Home, Senior Metals Columnist at Reuters, explains tin's importance in the tech sector:

"It has been described, I think accurately, as the metal that glues - the internet together. No tin soldering, no circuit boards. No circuit boards, no electronic goods. So it is very beholden to cycles in the electronic goods sector."

Tin Demand to Double Over the Next 20 years

The global tin market is poised for significant growth in the coming decades, driven by the rapid adoption of advanced technologies, renewable energy, and electrification. Underpinned by its critical applications in electronics, semiconductors, AI, solar energy, and electric vehicles, tin demand is projected to double over the next 20 years.

Paul Barrett, CEO of Rome Resources, emphasizes tin's irreplaceable role in the electronics industry, stating, "The use of tin for electronics is there is no replacement, so it is basically the connective tissue of the electronics."

The expansion of AI technologies and data centers, and the transition to electric vehicles is boosting tin consumption is expected to be a major driver of tin demand growth.

Barrett notes, "We are seeing a massive demand now from AI, the massive computing technology, the amount of chips that are required, and therefore, the amount of tin [...] There's 3 times more tin in an electric vehicle than there is in the conventional one."

This aligns with Andy Home's sentiments which identifies the exponential growth of EVs, 5G devices, IoT, and data centers as key factors underpinning the surging demand for tin. This underscores the need for new tin supply to come online in the coming years to meet the projected demand growth, presenting opportunities for investors in the tin space.

Supply Disruptions and Structural Deficits

While tin has robust demand fundamentals, the supply side of the equation is riddled with risks that could lead to severe shortages in the coming years. The most immediate concern is the ongoing suspension of the Man Maw mine in Myanmar, which accounts for 7% of global tin supply.

• The Myanmar military government ordered all tin mines in the Wa State to be shut in August 2022 for a supposed audit and there is no timeline for when operations will resume. Since the shutdown, tin concentrate imports from Myanmar to China have collapsed over 90%, a clear sign mining activity has not resumed in any meaningful way.
• The second major supply risk facing the tin market is Indonesia's drive to ban exports of unprocessed metals and move down the value chain. As the world's largest exporter of refined tin, accounting for one-third of global trade, any restrictions on Indonesian shipments would have an outsized impact on the market.

Indonesia successfully implemented a nickel ore export ban in 2020, but Home explains the dynamics around tin are more challenging given the high-tech nature of its end markets:

"You're going to need to persuade all the world's circuit board companies, all the semiconductor guys to come and relocate to Indonesia so they can use Indonesian tin in their soldering? You know, this is a very well-established supply chain, with Chinese, Taiwanese, Hong Kong, other Asian players. No one's really going to do that."

Beyond these near-term disruptions, the global tin industry faces a structural supply deficit due to a lack of new mines in development. Over 80% of global tin reserves are located in just five countries - China, Indonesia, Peru, Bolivia and Brazil - all of which face varying degrees of political, regulatory and environmental risks.

Rome Resources: A Premier Pure-Tin Play

The Democratic Republic of Congo (DRC) is emerging as a significant player in tin production, offering high-grade deposits and potentially faster development timelines compared to other jurisdictions. Despite historical perceptions of risk, the DRC's mining code is considered stable and supportive of responsible mining operations.

The International Energy Agency's analysis of future tin demand further supports the bullish outlook, with even the most conservative projection calling for a doubling of tin demand by 2040. Mark Gasson, Executive Chairman of Rome Resources, highlights the scale of the expected demand growth, stating,

"We require another 50,000 tons of tin annually. Rome Resources will be in production by 2030."

Rome Resources (AIM: RMR) offers investors a compelling opportunity to gain exposure to high-grade tin assets in the Democratic Republic of Congo (DRC). The company's Kalayi and Mont Agoma projects host some of the highest grade tin mineralization globally, with Kalayi a pure-play tin project and Mont Agoma, a polymetallic system also containing copper and zinc sulfides.

CEO Paul Barrett highlighted the significant potential of Kalayi and Mont Agoma projects: "From what we're seeing, it could well be the much bigger prize of the two projects."

Upcoming drill results from both projects provide potential near-term catalysts for Rome Resources. With a modest US$20 million market capitalization, the company appears undervalued relative to the scale of its assets and the potential value creation as it continues to derisk and advance its projects.

Rome Resources is led by a management team with a history of successfully advancing and monetizing projects in the DRC. As Barrett explains:

"What's happened in the past with the team is that there's been three or four other projects that they brought from discovery through to PFS level and then sold on or monetized or changed the management and changed it into a mighty company rather than an exploration company."

Notably, despite the DRC's historical reputation, producers like Alphamin are successfully operating in the country without issue. Located just 8 kilometers from Alphamin, Rome Resources benefits from an analogous setting.

Rome Resources' Development Progress and Upcoming Catalysts

Rome Resources' ongoing drilling campaign is showing promising indications of tin, copper and zinc mineralization at Mont Agoma. Drilling progress highlighted drill holes MADD016A and MADD017 encountered wide zones of tin-polymetallic mineralization, with on-site assessments suggesting the presence of non-visible disseminated mineralization. Barrett commented:

"Drilling continues apace at both Kalayi and Mont Agoma.  The flow of samples for assay reporting is continuing, with the first batch now at ALS Johannesburg.  Initial assessments from the cores continue to be very promising, in terms of both tin and copper indications and we look forward to being able to update the market as soon as laboratory analyses become available."

Barrett noted that current indications point to a significant increase in widths of tin mineralization in the southeasternmost holes along strike and at depth, with grades to be confirmed in laboratory analyses. The company is also seeing a strong association of tin and copper mineralization at Mont Agoma, drawing an analogy to the San Rafael mine in Peru which commenced operations as a copper mine before transitioning to tin.

"We are encouraged by what appears to be a marked increase in tin mineralisation as drilling progresses towards the southeast and at deeper levels. The directors of Rome Resources believe that the strong association of tin and copper mineralisation further supports our analogy with San Rafael in Peru which commenced operations as a copper mine before passing through a transition zone of tin and copper."

As of October 2024, Rome Resources has completed a total of 1,336 meters of drilling across its Kalayi and Mont Agoma projects in the DRC, with 1,001 meters drilled at Kalayi and 335 meters at Mont Agoma. The current campaign includes seven completed holes at Kalayi and one at Mont Agoma, with three drill rigs currently operating and a fourth being mobilized by helicopter from the company's base at Osokare, 40 kilometers away. The fourth rig is expected to begin drilling at Mont Agoma shortly, increasing the project's drilling capacity.

Results from the samples are expected to be released and the next batch of samples from Mont Agoma and Kalayi is anticipated to be ready for transport from the project site.

Barrett commented: "I am very pleased with overall drilling progress and the team's professionalism on the ground, evident from a management site visit earlier in the month. The team are pushing ahead as fast as possible, with each drill hole so far showing promise on both the tin front and, notably in Mont Agoma, on the copper front as well."

The Investment Thesis for Tin

• Tin is a critical component in a wide range of high-growth industries that are driving the global economy. The rapid adoption of electric vehicles, 5G technology, renewable energy infrastructure, and the expansion of data centers and AI computing capacity are all contributing to a significant increase in tin demand.
• The global tin supply chain is facing significant disruptions due to geopolitical factors in key producing countries, creating uncertainty around the future of tin supply from the country. The Democratic Republic of Congo (DRC) is emerging as a significant player in tin production, offering high-grade deposits and potentially faster development timelines compared to other jurisdictions.
• The tin industry is facing a longer-term structural deficit due to a scarcity of new mine development and the depletion of existing reserves. With demand forecast to outstrip supply, the market is likely to experience persistent tightness and price support in the coming years.
• High-grade exploration assets in the Democratic Republic of Congo (DRC), Kalayi and Mont Agoma projects, host some of the highest grade tin mineralization globally, with Kalayi being a pure-play tin project and Mont Agoma also containing significant copper and zinc.
  • The company is currently drilling both projects with four rigs, and initial assay results are expected in the coming weeks, providing potential catalysts for the stock.
  • The near-surface, high-grade mineralization at Rome Resources' Kalayi could allow for a fast-track, low capex pilot production scenario that generates early cashflow while the company continues to expand the resource through drilling.
  • The company is looking to bring in a strategic partner to help advance the projects and derisk the development timeline, creating value for shareholders through a potential joint venture or sale.
  • The company's modest ~US$20 million market capitalization and lack of debt means that a large portion of any increase in the tin price should flow directly to its bottom line and drive a re-rating of the stock. With tin supply constrained and demand growing, Rome Resources is well-positioned to benefit from a tightening market and higher prices in the coming years.

Conclusion

Tin stands at the intersection of the digital revolution and green energy transition, positioning it as an essential metal for the technologies of the 21st century. With demand poised to double in the next two decades and supply facing significant challenges, tin presents investors with an attractive long-term return profile.

While investment options for direct tin exposure remain limited, Rome Resources offers a premier pure-play opportunity in a high-grade, drill-ready tin project with considerable exploration upside. Backed by a management team with experience creating shareholder value in the DRC, the company is well-placed to benefit from the strong fundamental outlook for tin prices.

As Rome Resources delivers drill results and grows its resource base in the coming months, the scale of the prize at its Kalayi and Mont Agoma projects should become apparent, providing a potential re-rating opportunity for early investors. For those looking to gain exposure to a critical metal that will power our technological future, Rome Resources and the tin sector warrant serious consideration.

_References:

1. _{Crux Investor (September 2024). The Case for Tin - An Overlooked Critical Metal for the Technology Revolution}
2. _{Crux Investor (November 2024). Rome Resources: Repeating Past Success to Monetize High-grade Tin and Polymetallic Projects in DRC}
3. _{Crux Investor (November 2024). Tin: The Overlooked Tech Metal to Buy for the EV and AI Boom}
4. _{Rome Resources, News Release (October 2024). Update in relation to drilling operations}
5. _{Rome Resources, News Release (October 2024). Promising Copper-Tin Mineralisation at Mont Agoma}