https://mailchi.

mp/28e3646a9b68/tin-in-the-news-21-april-9064857

Elementos pens processing plant contract

26 September: Elementos has completed a significant milestone in the development of its Oropesa

project by signing a contract to develop the processing plant.

Elementos, via its local Spanish subsidiary Minas de Estano de Espana, has awarded an Early
Contractor Involvement (ECI) contract to local Spanish company Duro Felguera. The contractor
specialises in the delivery of Engineering, Procurement, and Construction (EPC) contracts for large
industrial projects.

The ECI is split into two phases. In the first stage, Duro Felguera will mature the engineering studies
past the level suitable for Elementos’ Definitive Feasibility Study. The contractor will also provide a
lump sum cost for completing the EPC delivery of the plant. Around 90% of the final EPC contract has
already been agreed.

Once this work has been completed, approved by Elementos’ financiers and government, and a final
investment decision has been made, Duro Felguera will deliver the processing plant for the Oropesa
project. This stage, however, is not fully binding, which allows Elementos flexibility in case of
unforeseen challenges or alternative approaches.

In Elementos' Optimisation Study for Oropesa, published in March 2022, the company estimated that
the plant would process some 1Mtpa ore. This follows a 20% reduction in mined mass via ore sorting
technology and would result in 3,350 tonnes of tin-in-concentrate annually.

Our view: Signing a contract with an established EPC delivery company is a boost to the development
of the Oropesa project. Managing Director Joe David explained that "the mineral processing plant
makes up a large portion of the capital cost of building the Oropesa tin project, and partnering with
Duro Felguera significantly de-risks this package".

The processing plant is likely to comprise more than half (~55-70%) of the projects’ overall capital
costs. Under the first stage of the ECI, Duro Felguera will deliver a binding EPC delivery price and
contract, which drastically reduces the risk and amount of set aside by Elementos to cover delivery of
the plant. Having this cost set, as well as operation and sustaining capital cost estimates provided by
Duro Felguera, will make it easier for Elementos to attract project financing.