In our ongoing
efforts to provide you with broader communications and industry
information, we are pleased to issue this Industry Bulletin discussing Tin,
a minor base metal that has recently seen a surge in demand and price and
to which Avalon has exposure through its East Kemptville Tin-Indium
project. Demand for tin is growing rapidly, due to its
environmentally-benign properties and its increasing application in solders
for electronics, where it provides a non-toxic alternative for lead.
Uses of Tin
Tin was one of the first metals known to man. Throughout ancient history,
various cultures recognized the virtues of tin in coatings, alloys such as
bronze or pewter, and use of the metal increased with advancing technology.
Today, tin remains an important metal in industry even though its
consumption is much smaller than many other metals, in the order of 300,000
tonnes consumed annually, compared with some 20 million tonnes of aluminum.
The reason is that in many modern applications, only small amounts of tin
are required.
Tin is a malleable, ductile, silvery-white metal. Tin bonds readily to
iron, and has been used as a coating on steel to prevent corrosion. This
application was so widely used for food containers that they became known
as "tin cans" or "tins". 'Tin foil' was also once a
common wrapping material for foods and drugs; however it was replaced in
the early 20th century by the use of aluminum foil.. Despite this
evolution, many still (incorrectly) referred to these as "tin foils".
There are many other modern uses for tin and tin alloys including:
- electrically conductive coatings used in panel
lighting and in the production of frost-free windshields
- floating molten glass on top of molten tin
(creating float glass) in order to make a flat surfaces (e.g. window
glass)
- chemical compounds used in a variety of
applications from fire-proofing cloth, to making PVC stabilisers and
wood preservatives.
- niobium-tin compounds commercially used as wires
for superconducting magnets.
The biggest driver
on tin demand in recent years has been from environmental pressures and the
move to lead-free solders in electrical circuits to eliminate the problems
of toxicity caused by lead, backed by legislation in many countries. This
has led some to characterize tin as a "Green Metal". Solders that
contained as little as 30% tin, are being replaced with solders containing
aver 95% tin for the same tasks, a huge boost in demand. Compounding this
new demand has been the enormous growth in sales of electronics products and
electrical appliances in both developed and emerging markets.
Tin Prices
Tin production is concentrated in South East Asia, Latin America and China.
Tin has not been mined in North America since 1993 and most historical
production was by-product to zinc and copper. Until 1985, Tin production
and pricing was controlled by an international cartel that collapsed with
the release of large stockpiles into the market in the late 1980's causing
prices to fall from US$6/lb to as low as $2/lb in the early 1990's.
http://www.basemetals.com/html/sninfo.htm
As a commodity traded on the London Metal Exchange, prices have shown a
dramatic increase over the past 2-3 years. In 2005 and 2006, tin prices
averaged in the order of US$4.00/lb. In 2007, tin reached $6.50/lb. During
2008, prices have steadily increased, such that current prices are in the
order of $11.0012.00/lb. The world tin price has rallied by 50% since
the start of the year, buoyed by broad strength in pricing of base metals
and such tin-specific factors as uneven production from Indonesia and erratic exports from China. In a quarterly
commodities report, UBS Securities says tin prices should peak this year
and decline in 2009but remain above historical average levels.
http://www.infomine.com/investment/historicalcharts/showcharts.asp?c=Tin
East Kemptville Project
Avalon is well positioned to benefit from the new demand for tin through
its exposure to large tin resources at its East Kemptville Tin-Indium
project in southwestern Nova Scotia. East Kemptville hosts large, low-grade
tin-zinc-copper resources that were mined by Rio Algom Ltd from 1985 to
1991. An internal report prepared in December, 1989, prior to closure,
reported "Geological Reserves" (not NI43-101 compliant, and
therefore not to be relied upon) as 45.4 million tonnes grading 0.182% tin.
Avalon is presently carrying out a compilation of the historical mine data
to re-evaluate its economic potential in light of current metal prices and
its potential to produce the rare metal indium as a valuable by-product. A
"desk-top" preliminary economic model for renewed production at
East Kemptville is currently being prepared by independent consultants
Wardrop Engineering and the results will be available over the next few
weeks. A positive conclusion will lead to the preparation of a more formal
Preliminary Economic Assessment, later in 2008.
For further information about Avalon and its East Kemptville project,
please visit Avalon's website at http://www.avalonventures.com
If you have any comments or questions, please do not hesitate to post them on
Avalon's official investor relations hub at http://www.agoracom.com/IR/Avalon
.
Regards,
AGORACOM Investor Relations
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