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 September 2022:
- Q3 tin
production of
3,139
tonnes exceeds
market guidance of 3,000
tonnes
-
Q3
EBITDA4 estimate
of
US$30.1m
represents a 44%
EBITDA margin3,4
at a tin price of US$22,011/t
-
AISC4 per tonne of tin
sold reduced by
10% compared to
the prior quarter
- Mpama South
development project progressing
according to plan
- Exploration activities in
search of a third tin deposit
accelerated
Operational and Financial
Summary for the Quarter ended
September
20222
Description |
Units |
Actual |
|
|
Quarter ended September 2022 |
Quarter ended June 2022 |
Change |
Ore Processed |
Tonnes |
112,179 |
112,569 |
0% |
Tin Grade Processed |
% Sn |
3.90 |
3.65 |
7% |
Overall Plant Recovery |
% |
72 |
77 |
-7% |
Contained Tin Produced |
Tonnes |
3,139 |
3,180 |
-1% |
Contained Tin Sold |
Tonnes |
3,080 |
3,229 |
-5% |
EBITDA3,4 (Q3 2022 guidance) |
US$'000 |
30,100 |
67,004 |
-55% |
AISC3, 4 (Q3 2022 guidance) |
US$/t sold |
13,200 |
14,677 |
-10% |
Net Cash4 (Cash less debt) |
US$'000 |
112,077 |
138,146 |
-19% |
Dividends paid, including minorities |
US$'000 |
35,840 |
0 |
+ve |
Tin Price Achieved |
US$/t |
22,011 |
35,345 |
-38% |
__________________________________________________________________________________________
1Data obtained from International Tin
Association Tin Industry Review Update 2021 2Production 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. 3Q3 2022 EBITDA, EBITDA margin
and AISC represent management’s guidance. 4This 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. Operational and
Financial Performance –
Q3 2022
Contained tin production of 3,139 tonnes was in
line with the previous quarter and above market guidance of 3,000
tonnes. A highly mineralised area underground, not previously
included in the mineral resource or mine plan due to its
structurally complex nature, was successfully mined and processed
during the quarter. This area delivered ore at good tin grades but
contained high levels of sulphides which impacted processing
recoveries.
Sales volumes were in line with production at an
average achieved tin price of US$22 011/t and weighted towards the
back end of the quarter. Year-to-date contained tin production of
9,380 tonnes has exceeded the forecast rate to achieve market
guidance of 12,000 tonnes for the year ending December 2022. We
expect contained tin production and sales of approximately 3,000
tonnes for the quarter ending December 2022.
AISC per tonne of tin sold is expected to
decrease by 10% to US$13 200 due to the impact of the lower tin
prices on the off-mine costs particularly to product marketing
fees, royalties, export duties and smelter payables.
EBITDA for Q3 2022 is estimated at US$30.1
million (Q2: US$67 million) following a 38% reduction in the tin
price quarter on quarter. This represents a healthy EBITDA margin
of 44% in a low tin price environment. Tin currently trades at
between US$20,000/t and US$21,000/t with demand having been
impacted by worsening global macroeconomics. The Company remains of
the opinion that global tin supply is likely to be constrained
during the next five years while demand for tin is expected to
increase. The anticipated production expansion from the development
of the Mpama South deposit remains a priority and is progressing
well.
The Alphamin consolidated Net Cash position of
US$112 million at quarter-end is after dividend payments of US$36
million to Alphamin shareholders and minority shareholders of the
operating mine.
Alphamin’s unaudited consolidated financial
statements and accompanying Management’s Discussion and Analysis
for the quarter ended 30 September 2022 are expected to be released
on or about 8 November 2022.
Mpama South development project
The Mpama South project, which is adjacent to
the producing Mpama North mine, is expected to produce
approximately 7,200 tonnes of contained tin per year effective
FY2024 thereby increasing Alphamin’s annual tin production to
~20,000 tonnes. The project is progressing on schedule for targeted
commissioning in December 2023. Overall project completion is at
18.6%, and 84.3% of the procurement requirements have been
finalised and ordered. The project is not expected to exceed its
total cost estimate of US$116 million.
Exploration activities
Alphamin’s vision is to become one of the
world’s largest sustainable tin producers. In addition to drilling
for resource extensions at Mpama North and Mpama South, the Company
is actively exploring for more tin deposits on its license
areas.
Resource expansion drilling, resource confidence
drilling and new deposit discovery drilling progressed well during
the third quarter with 9,094 metres drilled.
The Bisie Ridge Phase
1 new discovery drilling campaign saw 2,355 metres drilled
completing 17 holes in the quarter. Minor visual cassiterite was
intersected in two drillholes while prospective associated chlorite
alteration was intercepted in multiple other drillholes, assays are
awaited. The Phase 1 campaign has been accelerated with ~90
drillholes planned in fences across the Bisie Ridge on six highly
anomalous targets, following which a Phase 2 campaign will
delineate any discoveries or else in-fill the most prospective
targets.
The Mpama South Phase
6 drilling campaign is the largest single campaign to date on the
licence and aims to both in-fill and extend the Mineral Resource
announced on 30 May 2022. An update to that Mineral Resource is
expected in December 2022. Based on the success of Phase 6 and the
still open-ended mineralization showing visual cassiterite and good
grades from already received assays, a Phase 7 resource extension
campaign will continue upon completion of Phase 6.
The Mpama North Phase
2 drilling campaign progressed well during the quarter. Visual
intercepts of cassiterite were intersected on the southern and
eastern extensions of the orebody – many on current mining levels.
These intercepts contain the visual mineralization style
characteristic of the Mpama North mine and, although less
intensely mineralized than elsewhere, should provide valuable
blending material for the deeper high-grade zones of Mpama North,
thus potentially extending the life of mine and maintaining current
production levels for longer.
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 excluding
information relating to exploration activities. He is a Principal
Consultant and Director of Bara Consulting Pty Limited, an
independent technical consultant to the Company. Mr. Richard
Tayelor, BSc Hons, MSc (Eng.)), 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 relating to exploration activities. He is a full-time
employee of Pangea Pty Ltd and through a management services
agreement provides geological consulting services to Alphamin.
_________________________________________________________________________________________
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, statements relating to expected EBITDA, EBITDA
margin and AISC for Q3 2022, production guidance for Q4 2022, the
expectation of tin production from Mpama South and first tin
production targeted date and costs to complete the project,
expected global tin supply contraints and a widenening global tin
market deficit during the next five years, planned exploration
programmes and the timing thereof, the expectation of updating the
mineral resource estimate for Mpama South and the timing thereof,
as well as the intention to discover more tin deposits on its
license areas with a view to deliver additional mine developments
and incrementally increase tin supply. 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 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, effects of inflation, global supply chain and
other possible disruptions and delays which may impact the Mpama
South development schedule and time to completion as well as the
cost to complete development, uncertainties regarding exploration
outcomes on the Company’s license areas and the timing thereof,
uncertainties with respect to social, community and environmental
impacts, uninterupted access to required infrastructure and third
party service providers, adverse political and geopolitical events,
uncertainties regarding the legislative requirements in the
Democratic Republic of the Congo which may result in unexpected
fines and penalties, 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
MEASURES
This announcement refers to the following
non-IFRS financial performance measures:
EBITDA and EBITDA
margin
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.
EBITDA margin is EBITDA divided by gross
revenue.
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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