Sky Metals Maps Rapid Payback Profile at Tallebung Tin-Tungsten-Silver Project

Sky Metals (ASX: SKY) has completed a pre-feasibility study (PFS) for its Tallebung tin, tungsten and silver project in New South Wales, outlining a 3 million tonnes per annum open-pit development with an initial mine life of approximately seven years.

The base case requires pre-production capital of A$138.8 million to deliver a pre-tax internal rate of return (IRR) of 69%, a pre-tax net present value (NPV) at an 8% discount rate of about A$438m, and capital payback in less than 17 months.

Tallebung is modelled to produce an average 2,040t of tin, 31,700 metric tonne units of tungsten trioxide, and 315,000 ounces of silver each year, with only 66% of the global mineral resource estimate (MRE) included in the PFS mine plan.

Sky has restarted drilling to upgrade resources and extend the mine life, while also targeting a final investment decision (FID) and first production.

Strong Base Case Returns

The base case uses prices of US$45,000/t for tin, US$1,500/mtu for tungsten trioxide, and US$50/oz for silver, generating average annual EBITDA in excess of A$115m.

All-in sustaining cost (AISC) is estimated at US$5,653/t of tin produced after co-product credits, while life-of-mine revenue is modelled at about A$1.61 billion across tin, tungsten, and silver.

Using spot commodity prices referenced by Sky lifts the pre-tax IRR to 130%, the pre-tax NPV to about A$1.0 billion, and average annual EBITDA to more than A$221m, with payback falling below nine months and AISC turning negative after co-product credits.

“The Tallebung PFS outlines a project with exceptional project economics, rapid capital payback, modest upfront capital requirements and strong cash generation,” managing director and chief executive officer Oliver Davies said.

“Tallebung is not only a compelling economic opportunity, but also a strategically significant project—with tin and tungsten continuing to face supply constraints, Tallebung has the potential to become an important new source of reliable supply from a stable mining jurisdiction.”

Simple Open-Pit Development

The PFS is based on conventional open-cut mining and 21.476Mt of run-of-mine ore processed over about 7.25 operational years, with total material movement of 64.205Mt and an average strip ratio of 1.99:1.

Processing combines crushing, ore sorting, jigging, and gravity concentration before separating tin, tungsten, and silver into saleable product streams, with the process plant accounting for A$113.44m of the pre-production capital estimate.

The July 2026 MRE stands at 32.7Mt at 0.16% tin equivalent, including 36,800t of contained tin, 1.14 million mtu of contained tungsten trioxide, and 9.94Moz of contained silver.

No Ore Reserve has yet been declared, and the production target is underpinned by about 66% Measured and Indicated resources and 34% Inferred resources, which carry a lower level of geological confidence.

Resource Growth and Approvals

Drilling is underway to upgrade more than 11Mt of Inferred resources excluded from the current study and to expand the resource beyond its existing envelope, providing potential to extend the initial mine life.

Sky held A$17.6m cash at 30 June 2026 and has started discussions with strategic offtake, royalty, streaming and financing groups as it evaluates debt, equity and strategic funding pathways for development.

Environmental work is progressing through the New South Wales State Significant Development process, with the Environmental Impact Statement and Development Application targeted for lodgement by May 2027 and mining approval targeted for late 2027.

"With this first PFS now complete, our focus shifts to project extension, optimisation, completing environmental approvals, and progressing financing and offtake discussions,” Mr Davies said.

“These workstreams are designed to position Tallebung for FID during 2027, targeting first production in mid-2028.”