SmallCaps Spotlight: Sky Metals (ASX:SKY) on the Tallebung PFS — tungsten’s moment

## Episode snapshot - **Guest:** Oliver Davies, Managing Director, **Sky Metals (ASX:SKY)** - **Focus:** The released **Tallebung Pre-Feasibility Study (PFS)** - **Theme:** How **tungsten and silver credits** underpin a **low-cost tin** producer

## Key discussion points ### 1) Why this PFS matters - Sky Metals is advancing its **Tallebung project** in New South Wales, targeting **tin** with valuable **silver** and **tungsten** co-products. - Management highlights that the PFS puts **tungsten front and centre**, showing how it adds material value to the project.

### 2) Headline operational & economic takeaways - The tungsten and silver contributions are positioned as supporting **covering operating costs (op-ex)**, enabling a **low-cost tin** outcome. - Management references strong headline metrics from the PFS, including: - **NPV ~US$116m (8% discount)** - **EBITDA ~US$222m (base case)** based on spot pricing - A capital requirement of around **~US$140m capex** - Execution focus: the potential to move quickly into production given the **brownfields** nature of the site.

### 3) Processing metallurgy: why the flow sheet looks robust - The study is supported by **~four years of ongoing work** to nail down the flow sheet. - Management points to the project’s **deposit characteristics**—notably coarse mineralisation of tin, tungsten and silver—as helping make processing comparatively straightforward. - The approach emphasises **sorting/dense media style concepts (all-sorting)**, described as **proven** in similar tungsten/tin contexts (examples cited include Tasmania and Queensland projects).

### 4) What capital & offtake discussions mean for development - The PFS is framed as a strong base to engage and progress **offtake partnerships**. - Management notes supportive critical minerals activity in NSW and highlights the proximity of broader investment to the region.

### 5) What investors should watch next (6–12 months) - Near-term priorities include: - **Optimising tungsten recovery**, with the current recovery described as **tied to a tin-focused flow sheet** and an intention to improve tungsten performance. - **Ongoing drilling** to expand the resource base and potentially **extend mine life**. - Clear message on risk: **commodity price sensitivity** remains a key factor, though management argues the project’s simplicity and multiple metal credits provide some insulation.

## Main takeaway - The standout story of the Tallebung PFS is **tungsten’s contribution**: it strengthens economics and supports a **low-cost tin** thesis, while management prepares a focused path to **improve tungsten recovery** and **build the resource base**.

## Caveat / risk to keep in mind - **Commodity prices** (particularly for tungsten, tin and silver) can move outcomes; management’s key mitigating point is the project’s **robust, simplified configuration** and the **co-product credit structure**.

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