TIDMATM
RNS Number : 3805M
Andrada Mining Limited
14 September 2023
14 September 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")
Q2 Operational Update for the period ended 31 August 2023
Completion of the bulk sampling (lithium) pilot plant and
tantalum circuit commissioning.
Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African
technology metals mining company with a portfolio of mining and
exploration assets in Namibia hereby provides an unaudited
operational update for the second quarter ending 31 August 2023
("Q2 2024").
HIGHLIGHTS
OPERATIONS
-- 86% year-on-year ("YoY") increase in tin concentrate to 398
tonnes (Q2 2023: 214 tonnes).
-- 79% YoY increase in contained tin metal to 238 tonnes (Q2
2023: 133 tonnes).
-- Completion of the tantalum circuit ("Circuit") commissioning
with 225kg produced.
-- Improved safety performance to 0.86 LTIFR at the end of the
quarter compared to 0.95 at the end of Q1 2024 and 8.02 at the end
of Q2 2023.
LITHIUM DEVELOPMENT
-- Commissioning of the lithium pilot plant ("Pilot Plant")
completed.
-- Initial test campaigns have commenced to produce a consistent
saleable grade of lithium concentrate.
EXPLORATION PROGRAMME
-- Spodumene Hill inaugural drill results over the B1 and C1
pegmatites intersected high grade spodumene mineralisation with up
to 2.32% Li O.
o All drill holes intercepted lithium rich pegmatites.
o High grade tantalum mineralisation was also recorded
highlighting upside potential.
-- Lithium Ridge Reverse Circulation ("RC") drilling programme
provided initial batch of results with notable lithium
intersections with up to 2.13% Li O.
o Second batch of results are expected shortly.
-- Lithium Ridge infill channel sampling confirmed the existence
of continuous mineralisation at surface over a 6 km strike
length.
o When combined, the weighted average of the 27 highest lithium
grade channel sample lines amounted to 179 m at 1.20% Li O.
o The primary lithium minerals identified were spodumene and
petalite.
FINANCIAL
-- Average C1(1) operating cash costs for Q2 2024 and H1 2024
are within management guidance for the year, of between USD17 000
and USD20 000 per tonne of contained tin, at USD19 560 and USD18
161 respectively.
-- Average C2(2) operating costs for Q2 2024 and H1 2024 are
within management guidance for the year of between USD20 000 and
USD25 000 per tonne of contained tin, at USD22 252 and USD20 796
respectively.
-- All-in sustaining cost ("AISC") (3) for Q2 2024 within and H1
2024 below management guidance for the year of between USD25 000
and USD30 000 per tonne of contained tin, at USD26 671 and USD24
662 respectively. The stripping ratios have begun to decrease as
the new ore is reached through the push-back.
-- Approximately USD10 million (GBP7.7 million) raised through
issuance of unsecured convertible loan notes. Proceeds mainly
targeted at the expansion of the tin, tantalum, and lithium
exploration and production circuits. (see announcement dated 18
July 2023).
-- USD25 million financing with Orion Resource Partners
("Orion") was updated and will potentially be completed in the
quarter ending November 2023. (See announcement dated 15 August
2023).
-- Conclusion of NAD100 million (cUSD5.8 million) Development
Bank of Namibia ("DBN") financing occurred after the period end, on
5 September 2023.
o Initial drawdown of the facility on 12 September 2023.
-- Cash balance on 31 August 2023 was USD7 million (GBP6
million).
CORPORATE
-- Strategic partner process discussions ongoing with parties
that have met the strategic criteria.
Anth ony Viljoen, Chief Executive Officer, commented:
" Our main activity over the quarter involved the completion of
commissioning of the lithium pilot plant. The completion of
commissioning is key to expediting the metallurgical testwork that
is essential to incorporating the lithium circuit into the Run of
Mine production. The main objective of the testwork programme is to
determine the optimal processing facility for extracting
consistent, homogenous, saleable concentrate for both the chemical
and industrial lithium markets.
The operational team has been performing extremely well on the
existing plant annually. Therefore, the potential additional
lithium revenue credits from the integration of the lithium plant
to the main production circuit, could substantially enhance total
revenue. The conclusion of several work streams as well as the
completion of key financing partnerships this quarter, has notably
strengthened the Company's balance sheet for a transformational
period of growth and development."
OPERATIONAL SUMMARY
Table 1: Unaudited Uis Mine quarterly production and cost
performance
Description Unit Q1 Q2 Q2 H1 H1 YoY YoY QoQ
FY 2024 FY 2023 FY 2024 FY 2024 FY 2023 % <DELTA> % <DELTA> % <DELTA>
Quarterly Interim
Feed
grade % Sn 0.151 0.145 0.161 0.156 0.147 11% 6% 7%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Plant
processing
rate tph 135 100 138 136 99 39% 0% 3%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
214 134 232 446 286
Ore processed t 467 315 154 621 558 73% 56% 8%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Tin
concentrate t 359 214 398 758 455 86% 67% 11%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Contained
tin t 216 133 238 454 287 79% 58% 10%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Tin recovery % 67 69 64 65 68 -7% -2% -5%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Plant
availability % 91 89 92 92 89 3% 3% 1%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Plant
utilisation % 79 69 83 81 74 20% 10% 5%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Uis mine USD/t
C1 operating contained 19 18
cost(1) tin 15 741 22 903 560 161 20 094 -16% -10% 24%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Uis mine USD/t
C2 operating contained 22 20
cost(2) tin 18 235 25 245 252 796 22 668 -12% -8% 14%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
USD/t
Uis mine contained 26 24
AISC(3) tin 21 377 29 282 671 662 25 812 -9% -5% 25%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
USD/t
Tin price contained 25 25
achieved tin 25 149 22 975 183 912 25 525 10% 2% 0%
----------- --------- --------- --------- --------- --------- ---------- ---------- ----------
(1)C1 refers to operating cash costs per unit of production
excluding selling expenses and sustaining capital expenditure
associated with Uis Mine.
(2) C2 operating cash cost is the C1 amount including selling
expenses (logistics, smelting and royalties).
(3)All-in sustaining cost (AISC) incorporates all costs related
to sustaining production, capital expenditure associated with
developing and maintaining the Uis operation as well as
pre-stripping waste mining costs.
Safety performance
There was a single LTI incident during the quarter. However, the
operation's safety record continued to improve over the quarter
from a LTIFR of 0.95 at the end of Q1 FY 2024 to 0.86 at the end of
the quarter under review. The continued improvement in safety is
the result of the implementation of safety culture programmes
supported by independent external safety audits.
Increased volumes
Tin concentrate production increased by 86% to 398 tonnes
resulting in a 79% increase in contained tin to 238 tonnes YoY. The
plant processing rate increased by 39% YoY and 3% QoQ to 138 tph
due to the positive impact of the modular expansion implemented in
Q3 FY 2023. All costs in the quarter decreased YoY due to the
economies of scale from higher volumes and improved efficiencies.
Despite the QoQ increases, the cash costs and AISC were mostly
within the management guidance except for the H1 2024 AISC figures
that were below guidance .
As previously disclosed, the Company decided to expedite the
waste stripping of the mining pit, which resulted in an accelerated
pushback to access ore and inadvertently a spike in the quarter
stripping ratio to 4.9 (Q1 2024: 2.3). Stripping ratios have begun
to decrease as the ore is reached, and management expects the ratio
for H2 FY 2024 to be 3.9 resulting in an annual ratio of 3.8. The
lower recovery rates in the quarter were mainly due to the
increased throughput and significantly finer ore processed. The
costs of this however, remain within previous management
guidance.
LITHIUM, TANTALUM development & METALLURGY UPDATE
Completion of the Lithium Pilot Plant commissioning
Andrada completed the commissioning of the Pilot Plant with the
testing of samples to determine the optimal process for lithium
extraction from all three mining licences commencing in October
2023. The feed from Uis will constitute both run of mine ("ROM")
material and the discard from the tin processing plant, whilst that
from Lithium Ridge and Spodumene Hill will be ROM material.
The Pilot Plant is also targeted to produce a minimum of 2 400
tpa of saleable concentrate for glass-ceramics off-takers. To date,
the Company has sent high purity petalite concentrate produced
off-site to several potential customers and discussions to conclude
an initial sale of lithium product are advanced. The Company
believes that the concentrate is also potentially suitable as
feedstock for lithium refineries producing lithium carbonate or
lithium hydroxide for the battery manufacturing industry.
Completion of the Tantalum Circuit commissioning.
Similarly, the commissioning of the Tantalum Circuit was
successfully completed, and it is currently being optimised. During
commissioning, approximately 225 Kg of tantalum was produced.
Tantalum concentrate is used to produce a range of tantalum
chemicals or refined into metal for use in niche metal products or
alloys. Tantalum is essential for high-performance applications
such as capacitors, superalloys, and electronics for aerospace,
military, and consumer use. Current tantalum prices for 25% Ta O
are as high as USD170 000 per tonne .
EXPLORATION PROGRESS UPDATE
Mining licence 129: Spodumene Hill
An initial drill programme of 17 holes over the B1 and C1
pegmatite bodies was completed during the quarter All the drill
holes returned positive results with spodumene being identified in
all holes drilled (see announcement dated 6 July for full details
of these results). The programme returned weighted average grades
of up to 1.38% Li O and 285 ppm tantalum. The results of this
programme highlight the mineral potential of Spodumene Hill. The
Company has initiated a metallurgical programme to investigate the
optimal beneficiation process for the recovery of both lithium and
tantalum, whilst also producing tin as a by-product.
Argus Non-Ferrous Markets , Issue 23 - 174.Monday 11 September
2023
Mining licence 133: Lithium Ridge
Lithium Ridge infill channel sampling results confirmed the
existence of continuous mineralisation at surface over a 6 km
strike length. The primary lithium minerals identified were
spodumene and petalite and the weighted average of the 27 highest
lithium grade channel sample lines amounted to 179 m at 1.20% Li O.
(See announcement dated 29 August 2023).
Post-period, initial results for 14 out of 24 holes from the
Lithium Ridge RC drilling programme reported notable lithium
intersections with up to 2.13% Li O. (See announcement dated 6
September 2023).
Off-site testing update
Metallurgical test work to date has focused on the concentration
of petalite due to its prevalence in all the mining areas. Lithium
recovery has therefore been focussed on petalite recovery, whilst
the feasibility of concentrating other lithium bearing minerals
from the deposit is also being investigated. Testing for spodumene
is planned to commence in Q4 FY2024. Three technologies are being
explored to determine the optimal solution to extract petalite.
Test work has indicated that it may be possible to upgrade ore to a
saleable concentrate solely through DMS technology. Transfer of
off-site DMS and XRT testing to the Pilot Plant is currently
on-going.
FINANCE
Orion Resource Partners USD25 million financing
In August 2023, Andrada signed binding documentation for an
updated, conditional USD25 million funding package with Orion. The
financing is conditional on the satisfaction of requirements
customary with transactions of this nature and shareholder approval
of certain resolutions at the Company's Annual General Meeting
which is to be held on 29 September 2023. (see announcement dated
15 August 2023). Funding is expected to be completed around the end
of September 2023.
Development Bank of Namibia ("DBN") funding
Post-period end on 5 September 2023, DBN confirmed that all
conditions had been fulfilled or waived for the finalisation of a
N$100 million (USD5.8 million) financing. The proceeds are
ring-fenced for implementation of the Uis Mine Stage II Continuous
Improvement Project. (See announcement dated 5 September 2023). The
Company has drawn N$50 million from this facility to date.
Cash balance
The combined cash and cash equivalent balance on 31 August 2023
was USD7 million (GBP6 million). During the quarter the available
funds were mainly utilised for the commissioning of the Lithium
Pilot Plant and the Tantalum Circuit.
CORPORATE
Strategic process update
The strategic process to identify an appropriate partner to
participate in the lithium development is progressing well.
Discussions are ongoing with parties that have met the strategic
criteria and they are expected to continue beyond 30 September
2023. Meanwhile, the Company is focused on completing the
workstreams required to finalise the process. Further updates on
the strategic process will be communicated in due course as
appropriate.
Glossary of abbreviations
FY Financial year for the period March to April
GBP British pound sterling
---------------------------------------------
LTI Lost time injury
---------------------------------------------
LTIFR Lost time injury frequency rate
---------------------------------------------
ppm Parts per million
---------------------------------------------
Sn Symbol for tin
---------------------------------------------
t Tonnes
---------------------------------------------
tph/a Tonnes per hour/annum
---------------------------------------------
USD United States Dollar
---------------------------------------------
Contact
Andrada Mining Limited +27 (11) 268 6555
Anthony Viljoen, CEO investorrelations@andradamining.com
Sakhile Ndlovu, Investor Relations
Nominated Adviser
WH Ireland Limited
Katy Mitchell +44 (0) 207 220 1666
Corporate Adviser and Joint
Broker
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Matt Hasson +44 (0) 20 7907 8500
Stifel Nicolaus Europe Limited
Ashton Clanfield
Calum Stewart
Varun Talwar +44 (0) 20 7710 7600
Tavistock Financial PR (United +44 (0) 207 920 3150
Kingdom) andrada@tavistock.co.uk
Jos Simson
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.
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 existing mine, together with 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 extensive 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 the manner in which 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 that
has been implemented at all levels of the Company and aligns with
international standards.
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END
UPDGZGMLMFNGFZZ
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