Tallebung drilling puts resource scale to the test

SKY submitted the Scoping Report and received SEARs during the quarter, moving Tallebung into the defined EIS workstream. This reduces uncertainty around the approvals process, but is not approval completion and does not change the development timetable.

Quarter-end cash declined from A$20.6m to A$17.6m as drilling, studies and approvals work progressed. Net cash used in operating activities was A$0.57m, with exploration spend of A$2.87m; the current programme remained funded.

TBRC317 demonstrates the quality of the geological signal: 8m at 1.18% Sn and 0.25% W from 41m, including 3m at 2.88% Sn and 0.45% W. Repeated shallow, high-grade intersections and JORC-aligned sampling are already demonstrated; connected mineralised envelopes, true-width continuity, drill spacing and density remain unresolved.

1. 01Northeastern expansion: A shallow tin-tungsten-silver zone outside the existing MRE extends the footprint, but its value depends on follow-up connectivity.
2. 02Resource confidence: The next step is probability-weighted improvement in geometry and classification, not a binary conversion of every intersection into mineable inventory.
3. 03Product breadth: Tin remains the primary value driver; tungsten and silver are potential credits until recovery, distribution and payable assumptions are established.

Ore sorting and concentrate work provide the technical link: reported sorting-related work and saleable-concentrate testing reference tin recovery above 98%, followed by gravity or flotation concentration. Representative variability testing, mass balance and concentrate results across mineralised domains are still needed to support study-level design confidence. If those results align with continuous shallow envelopes, Tallebung’s development probability increases; until then, mine economics remain unproven.

Therefore, Tallebung has progressed from isolated drilling toward resource confidence, but the remaining underwriting risk is whether continuity and representative metallurgy convert that signal into a mineable, study-quality design.

Ongoing assay flow and bulk-sample work must establish marketable concentrate and recovery outcomes, while EIS preparation advances the defined approvals workstream.

Doradilla drilling and progress towards a first JORC resource could add support to the longer-dated option, but its 10–15Mt Exploration Target at A$0.31–0.42% Sn across 2.5km is not yet a JORC resource.

Tin’s use in solder for electronics and electrical equipment, combined with a structurally tight but volatile market, supports the long-term product backdrop. However, the supplied macro pack contains no independent global US$/t benchmark or 12-month forecast, so no short-term price deck should be embedded in SKY’s value. Supply constraints can improve the value of a successful resource, but cannot establish project economics.

SKY’s A$20.5m placement at A$0.155 per share on 12 February demonstrates that capital was available against visible project milestones. The 18.4% discount also shows the cost of that access. Current exploration is funded, while future resource-definition or development capital remains exposed to market conditions and project progress. The macro backdrop therefore supports access to the next work program, but not a lower project-risk discount ahead of delivery.