TIDMATM
RNS Number : 4449T
Andrada Mining Limited
20 March 2023
20 March 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information will be in the
public domain.
Andrada Mining Limited
("Andrada" or the "Company")
Quarterly, FY 2023 production and Company update
Lithium development on track and production capacity
significantly increased.
Andrada Mining Limited (AIM: ATM), an African technology metals
mining company with a portfolio of mining and exploration assets in
Namibia, provides an unaudited production update for the Uis Mine
("Uis") for its fourth quarter ("Q4") and full financial year ended
28 February 2023 ("FY 2023").
Highlights
Lithium
-- Anticipated completion of the lithium bulk-testing pilot facility in June 2023.
-- Metallurgical testwork done by Geolabs Global, an independent
test facility in South Africa has identified a process that could
produce a lithium concentrate suitable for buyers' specifications
in industrial and battery feedstock markets.
-- Drilling on the ML129 licence area (B1C1 pegmatites), to
investigate the visible spodumene mineralisation, commenced in
January 2023.
-- Field mapping of drill targets on the ML133 licence area (Nai Nais pegmatites) finalised.
-- Detailed exploration update scheduled for release in June 2023.
-- Andrada is exploring several options for achieving early
lithium revenues in the second half of the 2023 calendar year
including concentrate production from the bulk pilot plant.
Operations
-- Record quarterly production of 361 tonnes of tin concentrate
in FY Q4 2023, containing 214 tonnes of tin metal.
-- 19% increase in tin concentrate production year-on-year
("YoY") to 960 tonnes (FY 2022: 804 tonnes).
-- 18% increase in contained tin to 586 tonnes (FY 2022: 496 tonnes).
-- Lowest ever quarterly all-in sustaining costs ("AISC") at USD
18,236 per tonne of contained tin in Q4 2023 .
-- Full year AISC fell by 9% to USD 24,939 YoY.
-- Commencement of confirmatory drilling in February 2023 to
upgrade historic resources on proximal pegmatites.
Financing
-- Significant progress towards fulfilling the precedent
conditions for the Orion Resource Partners ("Orion") and the
Development Bank of Namibia ("DBN") financing.
-- Cash balance at the end of February 2023 increased by 16% to
GBP 8.6 million (USD 10.3 million) from GBP 7.4 million (USD 9.9
million) on 28 February 2022.
Management restructuring
-- Appointment of Frans Van Daalen as Chief Strategy Officer
("CSO") to drive business development strategy, with a focus on
accelerating the lithium project and Chris Smith as the Chief
Operations Officer ("COO"), both non-board positions.
Operational guidance for the 12 months ending 29 February 2024
("FY 2024")
-- Tin concentrate production guidance of between 1,400 tonnes
and 1,500 tonnes, an expected increase of between 45% to 56% YoY,
due to the plant expansion ramp-up.
-- Average operating cash costs excluding selling expenses
defined as C1 operating cash costs are projected to be between
USD17,000 and USD20,000. These are costs within management's
control that are expected to remain relatively flat from levels in
Q4 2023 (post expansion) and subject only to exchange rate
fluctuations.
-- Average operating cash cost per tonne produced including
selling expenses (shipping, freight, and royalties) projected to be
between USD20, 000 and USD25,000 and AISC between USD25,000 and
USD30,000. These costs are expected to rise mainly because of a
temporary increase in stripping rates for the V1/V2 pit and the
inclusion of the 4.5% royalty costs associated with the proposed
Orion transaction. The pushback width in the pit has increased from
approximately 50 metres to 75 metres in line with the expanded
capacity and the provision of safer and more efficient
operations.
The guidance excludes potential lithium and tantalum revenues.
Management will provide guidance following the commissioning of the
lithium pilot plant and tantalum circuit expected in June 2023.
Anth ony Viljoen, Chief Executive Officer, commented:
"The exceptional fourth quarter production performance is a
demonstration of the execution capability of Andrada's management
team. We have made excellent progress in realising the significant
economies of scale inherent in this uniquely large ore body. We
believe these economies of scale and the bringing online of lithium
production, will rapidly enhance the value of this outstanding
asset over the coming months.
The imminent completion of the bulk testing pilot facility will
enable Andrada to expedite the production of lithium, which could
place the Company as one of the foremost lithium producers on AIM.
Concurrent drilling programmes on the proximal pegmatites within
the ML 134 licence area aim to increase the size and confidence of
this resource. Furthermore, the recently commenced drilling
programmes on adjacent licence areas are designed to confirm our
belief that the Erongo region is one of the emerging tech-metals
provinces globally. Andrada's significant first mover advantage is
its ability to capitalise on the existing proven operational
footprint.
The completion of an inaugural Sustainability Report paves the
way for Andrada to not only be a producer of metals for the green
transition but also play its role as a responsible and sustainable
resource company of the future."
Operational summary
Table 1: Uis Mine actual quarterly production and cost
performance
Description Unit Q1 FY Q2 FY Q3 Q4 FY FY FY YoY
2023 2023 FY 2023* 2023 2023 2022 % <DELTA>
Plant
availability % 89 89 73 90.4 86.8 88.1 2
------------ -------- -------- ---------- -------- -------- -------- -----------
Plant
utilisation % 78 69 63 81.1 66.3 68.7 4
------------ -------- -------- ---------- -------- -------- -------- -----------
Plant
processing
rate tph 99 100 107 125 106 99 7
------------ -------- -------- ---------- -------- -------- -------- -----------
Ore processed t 152,243 134,315 90,278 196,982 573,818 541,700 6
------------ -------- -------- ---------- -------- -------- -------- -----------
Feed grade % Sn 0.149 0.145 0.140 0.154 0.154 0.148 4
------------ -------- -------- ---------- -------- -------- -------- -----------
Tin concentrate t 239 214 145 361 960 780 23
------------ -------- -------- ---------- -------- -------- -------- -----------
Contained
tin in
concentrate t 152 133 87 214 587 482 22
------------ -------- -------- ---------- -------- -------- -------- -----------
Tin recovery % 67 69 68 71 68 60 13
------------ -------- -------- ---------- -------- -------- -------- -----------
Uis mine US$/t
operating contained
C1 cost(1) tin 17,624 22,903 30,907 14,761 19,762 21,839 10
------------ -------- -------- ---------- -------- -------- -------- -----------
Uis mine US$/t
operating contained
cash cost(2) tin 20,989 25,245 33,207 17,303 22,287 25,209 12
------------ -------- -------- ---------- -------- -------- -------- -----------
US$/t
Uis mine contained
AISC(3) tin 23,526 29,282 38,570 18,236 24,939 27,515 9
------------ -------- -------- ---------- -------- -------- -------- -----------
US$/t
Tin price contained
achieved tin 34,367 22,975 22,625 25,265 25,051 38,604 35
------------ -------- -------- ---------- -------- -------- -------- -----------
(1) C1 refers to operating cash costs per unit of production
excluding the selling expenses
(2) Operating cash cost is the C1 including selling expenses
(logistics, smelting and royalties), it excludes sustaining capital
expenditure associated with Uis Mine.
(3) All-in sustaining cost incorporates all costs related to
sustaining production as well as the capital expenditure associated
with developing and maintaining the Uis operation, including
pre-stripping waste mining costs.
* Production period includes a five - week shutdown of the
processing plant from 7 September 2022 - 13 October 2022 which was
required to complete the construction and commissioning of the
expanded crushing and tin concentrating circuits .
LITHIUM
Metallurgical testing update
The metallurgical test work programme is focussed on producing a
lithium concentrate suitable to both the industrial lithium market
and the battery feedstock market. Laboratory scale test work has
established three suitable technologies for beneficiating lithium
in the ore, namely DMS, flotation and sensor-based ore sorting.
Test results from Geolab Global, have repeatedly produced
high-grade petalite concentrate (+/- 90% petalite, > 4.0% Li O)
displaying low contaminant levels (< 0.05% Fe O , < 1.0%
alkalis). The Company is now conducting bulk scale DMS, flotation
and ore sorting test work to optimise metallurgical parameters and
to determine ore variability. The results of the bulk test work,
and trials at the lithium pilot plant, will inform a definitive
feasibility study for lithium expansion to the current processing
plant.
Lithium pilot plant and tantalum circuit construction on
schedule
The lithium pilot plant project is progressing to schedule, with
the completion of construction targeted for June 2023. The project
is approximately 60% complete with all long lead equipment ready
for shipment to the mine. The major plant equipment is being
manufactured off-site and the earthworks have been completed. The
tantalum circuit construction is approximately 50% complete and on
track for full completion in June 2023.
Meanwhile, several early revenue options are being evaluated
such as potential output of a lithium concentrate from the lithium
bulk testing facility.
Progress on the lithium exploration programme over the mining
licences
Mining licence 129: B1 C1 pegmatites
Multiple exploration programmes were initiated during Q4. A
drill programme was initiated on the ML129 mining licence during
January 2023 to investigate the existence of spodumene
mineralisation within the B1 and C1 pegmatites. This on-going
programme comprises 17 diamond drill holes and to date all
completed holes have yielded visual confirmation of spodumene
within the pegmatite intersections. The analysis of drill core will
begin immediately after the completion of the programme, targeted
for end of March 2023.
Mining licence 133: Nai Nais pegmatites
A first-pass Reverse Circulation drilling programme will
commence in April 2023 on the Nai-Nais (ML133) licence area to
investigate the subsurface continuation of lithium and tin
mineralisation identified during the 2022 calendar year mapping and
sampling programme. An infill surface exploration programme started
in January 2023 to enhance the data resolution and to confirm the
continuity of lithium mineralisation along an identified strike
length of 6km.
OPERATIONS
Successful modular expansion of existing operations
Tin concentrate production increased by 19% to 960 tonnes
resulting in an 18% increase of contained tin to 586 tonnes YoY
confirming the success of the mine expansion. This double-digit
increase was achieved despite the requisite plant shutdown that
resulted in 35% loss of production in the third quarter (Q3") FY
2023. Production capacity has increased by approximately 70%
because of the expansion programme. The significantly higher
tonnage output reduced operating costs and AISC by 12% and 9%
respectively YoY, confirming the view that large scale bulk mining
at Uis is amenable to favourable economies of scale.
Resource expansion
The Uis proximal drilling campaign, on the ML134 mining licence
commenced in February 2023 and aims to validate the historical
drill information and increase confidence in the mineral resource
classification for tin. This campaign will also provide initial
information on the lithium and tantalum endowment of these
pegmatites. Approximately 78 drill holes have been planned for an
initial programme that targets the southern cluster, following
which an investigation will target the pegmatites north of the V1V2
resource. An improvement in the mineral resource confidence
classification will allow for the inclusion of the proximal
pegmatites into the techno-financial valuation of the project.
FINANCE
Cash balance
The combined cash and cash equivalent balance on 28 February
2023 was GBP 8.6 million (USD 10.3 million), provides sufficient
capital for the Company to execute its near-term capital
commitments for the pilot facility and tantalum circuit, whilst in
the interim the various conditions precedent for the additional
financing are being completed.
Orion Resource Partners ("Orion") and Development Bank of
Namibia ("DBN") funding update
The conditional finance arrangements for Orion and DBN,
previously announced on 5 July 2022, 15 September 2022, and 17
November 2022, have been combined into a single legal workstream to
reduce the timeline to financial closure. The Company still expects
to complete the process by the end of May 2023. Further updates
will be provided in due course.
EXECUTIVE STRUCTURE
Structural changes to align with strategic intent.
Andrada has strengthened its management structure by appointing
Chris Smith as the Chief Operations Officer, taking over from Frans
Van Daalen, who has been appointed to lead the business development
strategy as the CSO from February 2023, both are non-board
positions.
Chris Smith is a qualified chemist with a career spanning over
36 years at various senior management levels in the mining and
metallurgical industries. He joined Andrada in 2020 as the General
Manager in charge of operations, during which time he successfully
ramped up production ahead of the scheduled timelines and improved
safety performance by 60%. Chris has significant experience in
process optimisation and a proven track record of stimulating
operational performance. In the past six months, he has surpassed
the targets for plant expansion and will be instrumental in
optimising the operational processes for the next level of
growth.
Frans Van Daalen is a qualified engineer with over 20 years of
operational and technical experience across multiple commodities.
He was a co-founder and director of VBKom, a mining and industrial
engineering consultancy for approximately 10 years. Frans joined
the Company at inception and is well placed to drive the Company's
development as a significant global lithium producer.
Glossary of abbreviations
AISC All in sustaining cost
FY Financial year for the period March to April
---------------------------------------------
GBP British pound sterling
---------------------------------------------
Sn Symbol for tin
---------------------------------------------
t Tonnes
---------------------------------------------
tph Tonnes per hour
---------------------------------------------
Glossary of terms
AISC Incorporates all costs related to sustaining production. Includes the sustaining capital
expenditure
associated with developing and maintaining the Uis operation such as unaudited stripping waste
mining costs.
Operating cash cost Excludes the unaudited sustaining capital expenditure associated with developing and
maintaining
the Uis operation.
------------------------------------------------------------------------------------------------
Andrada Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO
Sakhile Ndlovu, Head of Investor
Relations
Nominated Adviser +44 (0) 207 220 1666
WH Ireland Limited
Katy Mitchell
Corporate Advisor and Joint Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield +44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited +44 (0) 20 7710 7600
Ashton Clanfield
Callum Stewart
Varun Talwar
Tavistock Financial PR (United
Kingdom) +44 (0) 207 920 3150
Emily Moss
Catherine Drummond
Adam Baynes
_______________________________________________________________________________________
About Andrada Mining Limited
Andrada Mining Limited, formerly Afritin Mining Limited, is a
London-listed technology metals mining company with a vision to
create a portfolio of globally significant, conflict-free,
production and exploration assets. The Company's flagship asset is
the Uis Mine in Namibia, formerly the world's largest hard-rock
open cast tin mine.
Lithium laboratory test work completed during the 2022 calendar
year indicated a high-grade, ultra-low iron lithium petalite
concentrate. The test work to convert lithium petalite concentrate
to battery-grade lithium hydroxide was initiated with Nagrom, a
leading Australian processing company, and commercial engagements
with lithium petalite concentrate off - takers are on-going. An
exploration drilling programme is currently underway with the aim
of expanding the tin resource over the fourteen additional,
historically mined pegmatites, all of which occur within a 5 km
radius of the current processing plant. The Company has set a
mineral resource target of 200 Mt to be delineated within the next
5 years. The substantial mineral resource potential allows the
Company to consider economies of scale.
Andrada is managed by a board of directors with extensive
industry knowledge and a management team with deep commercial and
technical skills. Furthermore, the Company is committed to the
sustainable development of its operations and the growth of its
business. This is demonstrated by how the leadership team places
significant emphasis on creating value for the wider community,
investors, and other key stakeholders. Andrada has established an
environmental, social and governance system which has been
implemented at all levels of the Company and aligns with
international standards.
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