Alphamin Resources Corp. (TSX-V:AFM) (JSE AltX:APH) 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 update for the year and quarter ended December 2022:
Operational and Financial Summary for the Year and Quarter ended December 20222
|Description||Units||Year ended December 2022||Year ended December 2021||Change||Quarter ended December 2022||Quarter ended September 2022||Change|
|Tin Grade Processed||% Sn||3.82||3.57||7%||4.00||3.90||2%|
|Overall Plant Recovery||%||75||74||1%||73||72||2%|
|Contained Tin Produced||Tonnes||12,493||10,969||14%||3,113||3,139||-1%|
|Contained Tin Sold||Tonnes||12,764||11,521||11%||3,119||3,080||1%|
|EBITDA3,4 (FY2022 and Q4 2022 guidance)||US$’000||222,215||198,592||12%||27,105||30,001||-10%|
|AISC3, 4 (FY2022 and Q4 2022 guidance)||US$/t sold||14,289||14,173||1%||13,420||13,089||3%|
|Net Cash4 (Cash less debt)||US$’000||109,335||68,233||60%||109,335||111,996||-2%|
|Dividends paid, including minorities||US$’000||71,518||5,555||1187%||0||35,379||n/a|
|Average Tin Price Achieved||US$/t||30,636||30,629||0%||21,436||22,380||-4%|
1Data obtained from International Tin Association Tin Industry Review 2022 2Information is disclosed on a 100% basis. Alphamin indirectly owns 84.14% of its operating subsidiary to which the information relates. 3FY2022 and Q4 2022 EBITDA represents 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
Alphamin achieved record tin production of 12,493 tonnes for the year ended December 2022, exceeding market guidance of 12,000 tonnes. Underground mining performed particularly well with both volumes and tin grades exceeding expectations. The processing plant achieved good recoveries at an average of 75%. 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 Q3 and Q4 2022. This area delivered ore at good tin grades but contained high levels of sulphides which impacted processing recoveries.
Contained tin production of 3,113 tonnes for Q4 2022 was in line with the previous quarter and above market guidance of 3,000 tonnes.
Sales volumes for FY2022 and Q4 were in line with production at an average achieved tin price of US$30,636/t and US$21,436/t, respectively. We expect contained tin production and sales of approximately 12,000 tonnes for the year ending December 2023.
AISC per tonne of tin sold remained relatively flat year-on-year at US$14,289/t in FY2022.
EBITDA for FY2022 and Q4 2022 is estimated at US$222m (2021: US$198.6m) and US$27.1m (Q3: US$30m), respectively. The record estimated FY2022 EBITDA saw an average tin price achieved of US$30,636/t, in line with current tin prices of around US$30,000/t. 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. In light of these market fundamentals, the development of the Mpama South project and consequent planned production expansion to approximately 20,000 tonnes of contained tin per year bodes well for future cash flow generation. The Mpama South project development remains on track for commissioning in December 2023.
The Alphamin consolidated Net Cash position of US$109 million at year-end is after dividend payments of US$71.5m to Alphamin shareholders and minority shareholders of the operating mine, US$30m cash applied towards the development of the Mpama South project, US$16.7m spent on exploration activities and DRC taxes paid of US$49.4m. Capital allocation during FY2023 will be prioritised towards the development of the Mpama South project, DRC income tax payments and shareholder distributions.
Alphamin’s audited consolidated financial statements and accompanying Management’s Discussion and Analysis for the year and quarter ended 31 December 2022 are expected to be released on or about March 13, 2023.
Final FY2022 Dividend Declared
The Board has declared a final FY2022 cash dividend of CAD$0.03 per share on the common shares (approximately US$28.7m in the aggregate). The Dividend will be payable on 10 March 2023 to shareholders of record as of the close of business on 24 February 2023. Together with the interim FY2022 dividend of CAD$0.03 per share declared on 5 July 2022, the total FY2022 dividends declared amount to CAD$0.06 per share.
Mpama South project progress
Works completed since the Company’s announcement of the development decision on 29 March 2022 are as follows:
The underground mine design has been finalised and approximately 580 metres of underground development on 2 levels connecting Mpama North and Mpama South has been completed. Development remains ongoing and on schedule.
The Mpama South portal geotechnical investigation has been completed and the design finalised. Surface excavation and adit development infrastructure have been completed with underground portal development having commenced in January 2023.
Several units of the underground mechanised fleet have arrived on site with regular deliveries scheduled in the coming months. Full fleet mobilisation is expected by the end of July 2023.
Progress on the processing plant is as follows:
The bulk earthworks and civils teams have mobilised to site with 50% of the bulk earthworks and 10% of the civil works having been completed. The SMPPEI construction team mobilisation and training has commenced. An advance team has started the erection of the concentrate drying and product storage building. The main team mobilisation is scheduled for March 2023.
The owner’s team has commenced with operational readiness preparation.
A new self-contained 500 room accommodation camp is being commissioned with 144 rooms ready for occupation.
The Mpama South development project is currently forecasted to complete within the budget of US$116m with commissioning targeted in December 2023.
External laboratory assays on the last batch of in-fill drill holes are expected imminently whereafter the updated Mpama South Resource will be finalised and announced to the market.
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.
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We acknowledge the [financial] support of the Government of Canada.