With the payment, Toyota Tsusho has now nominally earned around an 18.8% interest in the Achmmach Tin Project - which hosts a resource of 14.6 million tonnes at 0.9% tin for 135,000 tonnes of contained tin.
Wayne Bramwell, managing director of Kasbah, commented: "The payment of the $11 million by Toyota Tsusho is further endorsement of Kasbah's proposed development strategy for Achmmach."
The third and final staged payment to Kasbah is due within 90 days of completing the Definitive Feasibility Study (NYSE:DFS), and will be calculated as the lesser of either: Approximately 1.2% x DFS NPV; or 20% of DFS NPV minus A$15,000,000.
The DFS is already underway with a scheduled completion date of the December quarter 2013.
Bramwell also commented on the tin market, and said, "Short term price weakness is adversely impacting marginal cost tin producers and positioning the commodity for a new tin price regime once world economic conditions stabilise.
"Achmmach is positioned to capitalise on the new price landscape as large, sustainable tin supply sources are becoming increasingly rare."
Milestone PFS delivers economic and technical viability
Recently Kasbah proved up the economic and technical viability of Achmmach with the results from the Pre-Feasibility Study (NYSE:PFS) showing potential for a net present value of US$134 million
Low costs are a feature of the PFS findings, with highly competitive mine gate costs of US$65.76 per tonne of ore and project development costs, including all surface infrastructure, of US$167.
The PFS is based on an underground operation producing 1 million tonnes per annum, with a concentrator producing 6,880 tonnes of tin in concentrate each year for export to an Asian tin smelter.
Based on the 2013 Consensus tin price of US$24,407, this gives Kasbah the potential to achieve a net present value (NYSE:NPV) of US$134 million, although a base case NPV of US$79 million is also given, using a tin price of US$21,961.
Importantly, these figures could be improved based on potential capital cost reductions through optimisation of the surface infrastructure layout.
With 135,000 tonnes of contained tin in a resource of 14.6 million tonnes at greater than 0.9%, the Achmmach Tin Project is now a top five tin resource worldwide with one of the highest grades.
A recent resource upgrade at the project and the landmark deal with Toyota Tsusho are major achievements with have further de-risked the Achmmach project and position it as a strategic asset.
The investment by Toyota Tsusho fundamentally underwrites the project not just financially but as an economic and valuable asset to the tin industry worldwide.
Worth noting - the potential of Kasbah and the Achmmach project has not been lost on substantial shareholder Lion Selection Group - which recently increased its total holding in the company to 15.1%.
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