Alphamin Resources Corp. (AFM:TSXV, “Alphamin”, or the “Company”)
is pleased to provide the following operational update for the
quarter ended December 2019:
- Bridge repair completed and officially opened
on 25 January 2020
- Q4 2019 Tin production of 2,235 tons – at the
upper end of our guidance range
- AISC per ton of tin produced at
US$12,426, in line with previous guidance and
including incremental logistical costs while the bridge was under
repair, arsenic penalties and underground fleet additions
- Step change in processing recoveries to
70% following plant modifications
- Excellent safety performance with zero lost
time injuries during the quarter
- Updated 43-101 document completed following
change in mining method
This news release does not include Alphamin’s
audited consolidated financial results for the year and three
months ended December 31, 2019 which is expected to be released by
the end of March 2020. Certain financial information for the
quarter ended December 2019 is reported in this news release using
non-IFRS measures and is unaudited. See Non-IFRS Financial
Performance Measures below.
Operational Summary for the Quarter
ended December 2019
The following table sets forth selective
operational information for the quarter ended December 31,
2019:
Description |
Units |
Oct-19 |
Nov-19 |
Dec-19 |
Quarter ended December 2019 |
Quarter ended September 2019 |
Variance |
Tons processed |
Tons |
23,265 |
23,710 |
24,584 |
71,559 |
74,427 |
-4% |
Tin grade |
% Sn |
5.3% |
5.0% |
4.4% |
4.9% |
5.60% |
-12% |
Overall Plant recovery |
% |
53% |
70% |
69% |
64% |
56% |
14% |
Payable Tin produced |
Tons |
659 |
827 |
750 |
2,235 |
2,345 |
-5% |
Payable Tin sold |
Tons |
599 |
496 |
13 |
1,109 |
1,373 |
-19% |
AISC per ton payable Tin produced |
US$ |
|
|
|
12,426 |
11,168 |
11% |
The Bisie tin mine has continued with its
excellent safety record with zero lost-time injuries recorded
during the past quarter.
Contained tin production of 2,235 tons was in
line with our market guidance and followed a step change in
processing recoveries to ~70% (ultimate target: 72%) during
November and December 2019. Tin grades are variable depending on
where mining is taking place and tapered off to 4.9% during Q4
2019, in line with expectations.
Our Q4 2019 AISC per ton of payable tin produced
was US$12,426, negatively affected by US$447/t of incremental
logistical costs incurred while the bridge was under repair and
smelter penalties for high levels of arsenic in concentrate of
US$625/t. AISC includes capital expenditure of US$515/t related to
underground LHD (load, haul, dump machine) fleet additions.
Arsenic levels in ore mined have reduced
significantly during January 2020 resulting in low levels of
arsenic in concentrates produced post quarter-end. Irrespective,
laboratory test work and mineralogical investigations have revealed
that a relatively simple addition to the reagent suite is expected
to deal with high levels of deleterious arsenic in the final
concentrate. Delivery of the new reagent suite has been delayed due
to logistical constraints and now targeted for February 2020.
The repair work on the previously reported
collapsed bridge on the main national road has been completed by
the national road agency and the bridge was officially opened on 25
January 2020.
Company Guidance for the next Quarter
and remainder of the Financial Year:
We expect contained tin production of between
9,000 and 10,0001 tons for the year ending December 2020 with
run-of-mine tin grades averaging 4% and overall plant recoveries at
72%. Contained tin sales should be approximately 2,000 tons higher
than production as we re-instate outbound logistics following the
bridge collapse in Q4 2019.
We expect AISC per ton of contained tin produced
of between US$10,000 and US$12,0001 2 for the year ending December
2020.
For the quarter ending March 2020, we expect
contained tin production of between 2,000 and 2,200 tons. Mining,
and consequently tin production, is currently constrained following
a delay in delivery of a new LHD loader which only crossed the
repaired bridge on 25 January 2020. The LHD has remote controlled
functionality which is required to load ore blasted using our new
mining method and should be commissioned for operations by mid
February 2020.
Tin Market:
LME Tin prices are currently trading in a range
between US$16,000/t and US$18,000/t. The decrease in prices from
the 3-year historic average of US$20,000/t followed a reduction in
tin demand associated with challenges faced by the global
electronics industry on the back of the US/China and Japan/South
Korea trade wars. The recent coronavirus outbreak in China has had
a negative impact on base metal prices including tin. The Company
continues to focus on achieving full production at the lowest
possible AISC, which should provide us with a robust operating
margin based on current tin prices.
Life-of-mine optimisation
plans:
The Company is pleased to announce positive
results from the updated Life of Mine (“LOM”) plan for its Mpama
North Mine, including an updated Mineral Reserve Estimate
incorporating the transition from Sub Level caving (“SLC”) to a
Long Hole Stoping (“LHS”) mining method.The decision to transition
from SLC to the LHS mining method was made to reduce safety and
technical risks associated with SLC in the underground environment
encountered at Mpama North. The Company appointed Sound Mining
Solutions (“SMS”) to compile an Updated NI 43-101 technical report,
which is expected to be publicly filed shortly.
Highlights from the updated NI43-101 Technical
Report:
- Twelve year LOM maintained (2020-2032), based on current Proven
and Probable Mineral Reserves;
- Proven and Probable Mineral Reserves of 3.33Mt at a grade of
4.01% containing 133.4kt of tin;
- The Mpama North Mineral Resource remains open down dip, as well
as along strike below Level 9. Development drilling in these areas
is expected to commence Q1 2021 and has the potential to increase
the resource base whilst infill drilling has the potential to
convert a further portion of the existing Inferred Mineral
Resources to the Indicated Mineral Resource category. The combined
effect of the planned drilling could result in an extension of the
LOM;
- Average forecast annual contained tin production of
approximately 11,080 tons over the first 9 years LOM (2020 to
2028); and
- Average operating cash costs of US$9,451 per ton and all in
sustaining cash costs (“AISC”) of US$9,817 per ton (2020 to
2028)
As part of the Company’s three-year objective to
produce over 12,000 tons of contained tin per annum, a resource
drilling and conceptual small-scale development plan is being
finalised for the Company’s Mpama South prospect, located
approximately 1.5km south of the Mpama North mining complex. The
resource drilling and study campaign is budgeted at US$2.7 million
for the 2020 financial year. The potential accelerated development
of Mpama South would allow the Company to fully utilise excess
capacity in the process plant should the campaign confirm an
economically viable project. Viability of the Mpama South project
will depend on the size and tin grade of the deposit, which will
only be known upon completion of the resource drilling, assaying
and modeling.
In pursuit of further optimising overall tin
processing recoveries to above the targeted level of 72%, the
Company has initiated a program for the procurement and
installation of a fine tin recovery solution during the 2020
financial year.
Qualified Person
Mr. Vaughn Duke Pr.Eng. PMP, MBA, B.Sc. Mining
Engineering (Hons.), is a qualified person (QP) under NI 43-101 and
has reviewed and approved the scientific and technical information
contained in this news release. He is a Principal Consultant,
Partner and Director of Sound Mining, 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
USE OF NON-IFRS FINANCIAL PERFORMANCE
MEASURES
This news release refers to the following
non-IFRS financial performance measure: All-In Sustaining Cost
(“AISC”).
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 a similar measure presented
by other issuers. We use this measures internally to evaluate the
underlying operating performance of the Company for the reporting
periods presented. The use of this measure enables us to assess
performance trends and to evaluate the results of the underlying
business of the Company. We understand that certain investors, and
others who follow the Company’s performance, also assess
performance in this way.
We believe that this measure reflects our
performance and are useful indicators of our expected performance
in future periods. This 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.
Cash Costs
This measures the cash costs to produce a ton of
payable tin. This measure includes mine operating production
expenses such as mining, processing, administration, indirect
charges (including surface maintenance and camp), and smelting,
refining and freight, distribution and royalties. Cash Costs do not
include depreciation, depletion, and amortization, reclamation
expenses, capital sustaining and exploration expenses.
AISC
This measures the cash costs to produce a ton of
payable tin plus the capital sustaining costs to maintain the mine,
processing plant and infrastructure. This measure includes the Cash
Cost per ton and capital sustaining costs divided by tons of
payable tin produced. All-In Sustaining Cost per ton does not
include depreciation, depletion, and amortization, reclamation and
exploration expenses.
See “Cautionary Notes Regarding Forward-Looking
Statements” below as well as “Use of Non-IFRS Financial Performance
Measures” in our Management’s Discussion and Analysis for the three
months ended September 30, 2019.
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, statements relating to costs of production,
production volumes and anticipated tin grades and processing
recoveries. 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
and tin produced, general mining risks, processing plant
performance and recoveries, events causing actual operating
expenditure to be different to that forecasted, uncertainties
regarding global supply and demand for tin and market and sales
prices, uncertainties with respect to social, community and
environmental impacts, adverse political events, uncertainties with
respect to optimization opportunities for the mine, uncertainties
with respect to the impact of the announced bridge collapse on
liquidity 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.
_________________________________
1 Production and cost guidance is based on certain estimates and
assumptions, including but not limited to: Mineral Resources and
Mineral Reserves, geological formations, grade and continuity of
deposits and metallurgical characteristics and operating costs 2
Cash costs are based on various assumptions and estimates,
including, but not limited to: production volumes, as noted above,
commodity prices (2020 - Sn: $17,000) and operating costs. All
figures in are in US$ unless otherwise noted.
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