Alphamin Resources Corp. (AFM:TSXV, APH:JSE AltX, “Alphamin” or the
“Company”), a producer of 4% of the world’s mined tin1 from its
high grade operation in the Democratic Republic of Congo, has
released its unaudited consolidated financial statements and
accompanying Management’s Discussion and Analysis for the three and
six months ended June 30, 2021:
- Q2 EBITDA of
$34,1m, at a tin price of $28,308/t versus current
of $34,700/t
- Net Debt reduced
to $29,5m
- Contained tin
production of 2,412 tons (11% below prior
guidance and 8% below the prior quarter)
- Fine tin recovery
plant fully commissioned and producing from 26 June
2021
- Mpama South phase 3
drilling progressing to plan with high-grade
intercepts previously announced
- Mpama North Deeps
drilling commenced with additional rigs under mobilisation to
accelerate drilling campaign
A Media Snippet accompanying this announcement
is available by clicking on the image or link below:
Operational and Financial Summary for
the Quarter ended June 20212
Operational and Financial Performance
Contained tin production of 2,412 tons was 11%
below guidance (2,700 tons), impacted by a low feed grade of 3.2%
Sn compared to 3.8% Sn the previous quarter. The month of June 2021
saw lower than expected grades from underground. The variable
nature of high-grade tin mineralisation in the orebody may cause
large fluctuations in delivered grade – as a mitigating tool we
will increase planned waste development for the remainder of the
year in order to provide more mining flexibility for blending high-
and low-grade areas.
Taking into consideration the lower feed grade,
the processing plant performed well, treating 12% more material and
achieving recoveries of 72%.
Our EBITDA of $34,1m for Q2 2021 is 7% below Q1
2021 – the previous quarter benefitted from a significant catch-up
in tin sales following logistical bottlenecks during Q4 2020. Tin
prices are currently trading at around $34,700/t, 23% above prices
achieved during the past quarter.
Net debt amounted to $29,5m at 30 June 2021,
down 50% from the start of the financial year (31 December 2020:
$59,9m).
The Company has appointed Mr. Jan Trouw as the
on-mine Managing Director of its 84,14% subsidiary, Alphamin Bisie
Mining, effective 1 July 2021. Mr Trouw is well known to the
Alphamin team and has over 40 years of African mining experience –
recently as head of the Frontier copper mine in the DRC and prior
to that as General Manager of the high-grade Chibuluma copper mine
in Zambia. He was instrumental during late 2019 as an advisor in
developing the new mining method and mine design criteria for
Alphamin’s Bisie tin mine. We look forward to working with Mr Trouw
in realising our vision of becoming one of the world’s largest
long-life tin producers.
Over the last 7 years, Alphamin’s Bisie tin mine
has developed from an exploration asset to a steady state operating
mine, producing 4% of the world’s mined tin. Our Chief Operating
Officer, Mr Trevor Faber, was instrumental in delivering on this
key objective with exceptional drive under challenging conditions.
By mutual agreement, Mr Faber and the Company resolved that it’s
Bisie mine is in safe hands under the on-mine leadership of the
Managing Director, Mr Trouw, and his team. Therefore Mr Faber’s
role as corporate Chief Operating Officer is no longer required
with effect 5 August 2021. The Board wishes to express its sincere
gratitude to Mr Faber for a job well done and looks forward to
following his future successes in developing the next major
project.
Guidance for H2 2021
The grade of ore mined from underground in Q2
2021 was lower than that expected from the Mineral Resource model,
although some benefit was gained from additional tin mineralisation
delineated by grade control drilling. Overall, for material mined
since commissioning to date, the actual grades from underground
were substantially in line with the Resource Model after taking
account of planned dilution factors.
Underground practices relating to stope
planning, delineation and blasting were sub-optimal during H1 2021.
Our newly appointed ABM Managing Director, Jan Trouw, has already
introduced much improved planning and mining practices with
positive results.
For the second half of 2021 and into Q1 2022, we
expect to mine lower tin grades averaging 3,2% to 3,5%, which at
higher plant recoveries of 78% (including the FTP recovery) and
monthly throughput of 36,000t amounts to contained tin production
of between 900t and 1000t per month. Production guidance for H2
2021 is approximately 5,500t of contained tin (previous guidance:
6,500t). The grade of ore mined is expected to increase to an
average of 4% from Q2 2022 leaving this lower grade window as
temporary.
Growth Initiatives
Fine Tin Recovery Plant (FTP) -
The FTP is fully commissioned and has produced at steady state from
26 June 2021. Expenditure at completion amounted to US$5.7 million.
Production from the FTP since commissioning increased overall
contained tin production by 5%. This exceeded expectations so early
after commissioning. Optimisation work in pursuit of higher FTP
recoveries is ongoing.
Exploration Activities -
Alphamin’s exploration initiative aims to: extend the life-of-mine
at its currently producing Mpama North operation; to declare a
Maiden Mineral Resource for Mpama South (located 750 metres south
of Mpama North); and to discover at least one additional orebody on
the highly prospective Bisie Ridge (13km strike length).
Drilling at the Mpama North orebody commenced on
2 July 2021. An initial 15,000 metre (22 holes) drilling campaign
over 4 months is planned to test the strike and dip extension of
the current producing orebody, below 400m in depth from the mine
portal.
The initial Mpama South drilling program
comprises of 16,800m of which 12,300m (52 holes) has been
completed. Independent laboratory assays have been received for 39
holes to date. This initial drilling program is intended to form
the basis of a Mineral Resource estimation exercise, the results of
which are expected to be announced by the end of 2021. Infill
drilling and further step-out drilling will continue from after
August for the remainder of 2021. As previously announced, drilling
results to date indicate the potential for another high-grade
deposit, 750m South of the Company’s current producing Mpama North
mine.
In addition to Mpama North and Mpama South,
drilling on the highly prospective Bisie ridge (13km strike
length), which falls within the Company’s mining licence, is
expected to commence during Q3 2021. The Company’s appointed
structural specialists, TECT Geological Consulting, identified high
potential drill targets less than 8km south of the current
operating mine.
Covid-19 Pandemic and Impact on
Operations
The health of our employees is of paramount
importance and in this regard the Company has a range of Covid-19
awareness, prevention and other risk mitigation controls in
place.
To date, the Company has been able to continue
with normal production and concentrate sales activities and has not
been negatively affected by the Covid-19 pandemic.
Qualified Person
Mr. Clive Brown Pr. Eng., B.Sc. Engineering
(Mining), is a qualified person (QP) as defined in National
Instrument 43-101 and has reviewed and approved the scientific and
technical information contained in this news release. He is a
Principal Consultant and Director of Bara Consulting Pty Limited,
an independent technical consultant to the Company.
____________________________________________________________
FOR MORE INFORMATION, PLEASE CONTACT:
Maritz
Smith CEO Alphamin
Resources
Corp. Tel:
+230 269 4166E-mail: msmith@alphaminresources.com
CAUTION REGARDING FORWARD LOOKING
STATEMENTSInformation in this news release that is not a
statement of historical fact constitutes forward-looking
information. Forward-looking statements contained herein include,
without limitation, statements relating to expected future EBITDA
for Q2 2021, the impact of the Company’s fine tin recovery plant on
production and the timing and success of additional exploration
drilling outcomes. Forward-looking statements are based on
assumptions management believes to be reasonable at the time such
statements are made. There can be no assurance that such statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Although Alphamin has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. Factors that may cause
actual results to differ materially from expected results described
in forward-looking statements include, but are not limited to:
uncertainties associated with Alphamin’s resource and reserve
estimates, uncertainties regarding estimates of the expected mined
tin grades, processing plant performance and recoveries,
uncertainties regarding global supply and demand for tin and market
and sales prices, uncertainties with respect to social, community
and environmental impacts, uninterupted access to required
infrastructure, adverse political events, impacts of the global
Covid-19 pandemic on mining operations and commodity prices as well
as those risk factors set out in the Company’s Management
Discussion and Analysis and other disclosure documents available
under the Company’s profile at www.sedar.com. Forward-looking
statements contained herein are made as of the date of this news
release and Alphamin disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
Neither the TSX Venture Exchange nor its
regulation services provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
USE OF NON-IFRS FINANCIAL PERFORMANCE
MEASURESThis announcement refers to the following non-IFRS
financial performance measure:
EBITDA
EBITDA is profit before net finance expense,
income taxes and depreciation, depletion, and amortization. EBITDA
provides insight into our overall business performance (a
combination of cost management and growth) and is the corresponding
flow driver towards the objective of achieving industry-leading
returns. This measure assists readers in understanding the ongoing
cash generating potential of the business including liquidity to
fund working capital, servicing debt, and funding capital
expenditures and investment opportunities.
This measure is not recognized under IFRS as it
does not have any standardized meaning prescribed by IFRS and is
therefore unlikely to be comparable to similar measures presented
by other issuers. EBITDA data is intended to provide additional
information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
____________________________________________________________
1Data obtained from International Tin
Association Tin Industry Review 2020 2 Production information is
disclosed on a 100% basis. Alphamin indirectly owns 84.14% of its
operating subsidiary to which the information relates.
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