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, is
pleased to provide the following operational update for the quarter
ended March 2022:
- Q1
EBITDA2 of
US$98.1m,
up 32% from
prior quarter
- Contained tin
sold up 9% from the prior quarter to
3,336 tonnes
- Record plant recovery of
78% achieved (previous quarter: 75%)
- Net
cash2 position increased
90% to US$129.8m, after a US$30m dividend
payment
- Maiden mineral
resource declared and subsequently updated at Mpama
South
- Decision to
commence construction of the Mpama South mine following
positive PEA results
- Continued high grade assay
results from ongoing drilling campaigns at Mpama North and
Mpama South
Operational and Financial
Summary for the Quarter ended
March
20223
Description |
Units |
Actual |
|
|
Quarter ended March 2022 |
Quarter ended December 2021 |
Change |
Ore Processed |
Tonnes |
105,565 |
107,981 |
-2 |
% |
Tin Grade Processed |
% Sn |
3.7 |
3.9 |
-4 |
% |
Overall Plant Recovery |
% |
78 |
75 |
4 |
% |
Contained Tin Produced |
Tonnes |
3,061 |
3,114 |
-2 |
% |
Contained Tin Sold |
Tonnes |
3,336 |
3,056 |
9 |
% |
EBITDA2 |
US$'000 |
98 104 |
74,347 |
32 |
% |
Net Cash2 (Cash less debt) |
US$'000 |
129,775 |
68,233 |
90 |
% |
Tin Price Achieved |
US$/t |
43,834 |
38,432 |
14 |
% |
AISC2 |
$/ton sold |
15,782 |
15,117 |
4 |
% |
__________________________________________________________________________________________
1Data obtained from International Tin
Association Tin Industry Review Update 2021. 2This is not a
standardized financial measure and may not be comparable to similar
financial measures of other issuers.See “Use of Non-IFRS Financial
Measures” below for the composition and calculation of this
financial measure. 3Production and financial information is
disclosed on a 100% basis. Alphamin indirectly owns 84.14% of its
operating subsidiary to which the information relates. Totals may
not add due to rounding effects.Operational
and Financial Performance
– Q1 2022
Contained tin production of 3,061 tonnes is in
line with the previous quarter and FY2022 guidance. Underground
mining continued to deliver steady results and processing plant
recoveries increased to 78% from 75% the previous quarter.
Contained tin sales increased by 9% to 3,336 tonnes at an average
tin price of US$43,834/t. The AISC2 per tonne of contained tin sold
during Q1 2022 increased by 4% to US$15,782 from US$15,117 due to
the impact of a higher tin price on off-mine costs (as some of
these costs are variable and increase with increases in the tin
price) and taking delivery of a large amount of replacement mining
equipment. As a result of steady production, good cost control and
higher revenue, EBITDA for Q1 2022 amounted to US$98.1m, up 32%
from US$74.3m the previous quarter.
Alphamin’s unaudited consolidated financial
statements and accompanying Management’s Discussion and Analysis
for the quarter ended 31 March 2022 have been filed and are
available for viewing and download under the Company’s profile at
www.sedar.com.
Capital Allocation
Alphamin’s vision is to become one of the
world’s largest sustainable tin producers. From a capital
allocation perspective, the Board considers the combination of
investment in growth, significant exploration, and a high dividend
yield a robust value proposition. Dividend distributions will be
considered semi-annually based on excess free cash after taking
account of the capital funding requirements for the new Mpama South
expansion project recently announced.
Exploration activity continues to be a focus
area with expansionary and infill drilling expenditure of
~US$20million planned for FY2022. To date, approximately 85% of
drill holes completed intercepted visual tin mineralisation. A
number of market announcements were released regarding high-grade
assay results from drilling activities together with a maiden and
updated mineral resource statement for Mpama South.
The Alphamin consolidated Net Cash position
increased by US$61.5 million during Q1 2022 to US$129.8 million.
This increase is after a US$30 million cash dividend paid to
shareholders on 11 February 2022. The FY2021 DRC government tax
liability of US$43 million was paid in April 2022 subsequent to end
of the quarter.
Mpama South updated resource and
decision to commence with development
On 29 March 2022, the Company announced an
updated mineral resource for Mpama South and the decision to
commence with development. Mpama South’s development is expected to
increase annual contained tin production from the current 12,000tpa
to ~20,000tpa, approximating 6.6% of the world’s mined tin1. First
tin production from Mpama South is targeted for December 2023.
The PEA study for Mpama South is conceptual in
nature and PEA’s generally are most commonly applied to projects at
an early stage of exploration to conceptualise potential viability.
A PEA is not a pre-feasibility or feasibility study and the Company
does not purport the Mpama South PEA results to be equivalent to a
pre-feasibility or a feasibility study. Notwithstanding the very
preliminary and conceptual nature of the PEA for Mpama South, based
on the Company’s experience at Mpama North and knowledge base,
including regarding underground conditions, the mining method and
processing route, and the proximity and very similar
characteristics of the deposits, the Company believes that Mpama
South represents an immediately accessible adjacent mineral
resource to the current producing Mpama North mine and accordingly
a decision to commence with development has been taken.
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.
General economic
conditions
Global commodity prices have declined
significantly during the month of May 2022 - the tin price is
currently trading at ~US$34,000/t (Q1 2022: US$43,834/t). The
Company is a low-cost producer of tin with significant operating
margins at current prices and has a strong balance sheet with large
cash reserves for allocation towards its growth prospects,
particularly the development of the Mpama South project.
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
STATEMENTS
Information in this news release that is not a
statement of historical fact constitutes forward-looking
information. Forward-looking statements contained herein include,
without limitation, estimated impact of Mpama South on future tin
production and the timing thereof; expected additions to the
mineral resource base from further exploration; development of the
Mpama South project and the timing thereof; the timing and
estimated cost of future exploration programmes; possible future
dividend payments; the Company’s liquidity outlook; ; and the
sufficiency of current working capital. Such statements reflect the
current views of the Company with respect to future events and are
subject to certain risks, uncertainties and assumptions. Many
factors could cause the actual results, performance or achievements
of the Company to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements. Such factors include, without
limitation: price volatility in the spot and forward markets for
tin and other commodities; the economic and other effects of the
COVD-19 pandemic; significant capital requirements and the
availability and management of capital resources; additional
funding requirements; fluctuations in the international currency
markets and in the rates of exchange of the currencies of the
Democratic Republic of Congo (DRC) and the United States of America
(US); discrepancies between actual and estimated production and the
costs thereof; between actual and estimated reserves and resources
and between actual and estimated metallurgical recoveries; changes
in national and local government legislation in the DRC or any
other country in which Alphamin currently or may in the future
conduct business; taxation; controls, regulations and political or
economic developments in the countries in which Alphamin does or
may conduct business; the speculative nature of mineral exploration
and development, including the risks of obtaining and maintaining
the validity and enforceability of the necessary licenses and
permits and complying with the permitting requirements of each
jurisdiction in which Alphamin operates, including, but not limited
to: obtaining the necessary permits for the Bisie Project; the lack
of certainty with respect to foreign legal systems, which may not
be immune from the influence of political pressure, corruption or
other factors that are inconsistent with the rule of law; the
uncertainties inherent to current and future legal challenges
Alphamin is or may become a party to; diminishing quantities or
grades of reserves and resources; competition; loss of key
employees; inclement weather conditions; availability of power,
water, transportation routes and other required infrastructure for
the Bisie tin project; general economic conditions and inflation
and rising costs of labour, supplies, fuel and equipment; actual
results of current exploration or reclamation activities;
uncertainties inherent to mining economic studies; discrepancies
between actual and estimated capital costs for the development of
Mpama South; changes in project parameters as plans continue to be
refined; accidents; labour disputes; defective title to mineral
claims or property or contests over claims to mineral properties;
risks, uncertainties and unanticipated delays associated with
obtaining and maintaining necessary licenses, permits and
authorisations and complying with permitting requirements,
including those associated with the environment. In addition, there
are risks and hazards associated with the business of mineral
exploration, development and mining, including environmental events
and hazards, industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and losses of processed
tin (and the risk of inadequate insurance or inability to obtain
insurance to cover these risks), as well as “Risk Factors” included
elsewhere in this MD&A and Alphamin’s public disclosure
documents filed on and available 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
MEASURES
This announcement refers to the following
non-IFRS financial performance measures:
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.
NET CASH
Net cash is defined as cash and cash equivalents
less total current and non-current portions of interest-bearing
debt and lease liabilities.
AISC
This measures the costs to produce and sell a
tonne of contained tin plus the capital sustaining costs to
maintain the mine, processing plant and infrastructure. AISC
includes mine operating production expenses such as mining,
processing, administration, indirect charges (including surface
maintenance and camp and tailings dam construction costs), smelting
costs and deductions, refining and freight, distribution, royalties
and product marketing fees. AISC does not include depreciation,
depletion, and amortization, reclamation expenses, borrowing costs
and exploration expenses.
Sustaining capital expenditures are defined as
those expenditures which do not increase contained tin production
at a mine site and excludes all expenditures at the Company’s
projects and certain expenditures at the Company’s operating sites
which are deemed expansionary in nature.
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