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ALPHAMIN ANNOUNCES RECORD ANNUAL TIN PRODUCTION / EBITDA AND AISC GUIDANCE / US$50 MILLION TIN PREPAYMENT ARRANGEMENT SECURED

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ALPHAMIN ANNOUNCES RECORD ANNUAL TIN PRODUCTION / EBITDA AND AISC GUIDANCE / US$50 MILLION TIN PREPAYMENT ARRANGEMENT SECURED

 

 

 

 

 

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 2023:

  • FY2023 tin production of 12,568 tonnes, up 1% from the prior year
  • Q4 tin production of 3,126 tonnes
  • Q4 tin sales of 2,046 tonnes impacted by poor road conditions, which have subsequently improved
  • FY2023 EBITDA3,4 guidance of US$136m at an average tin price of US$26,009/t, with EBITDA negatively affected by a temporary delay in Q4 tin sales volumes
  • US$50 million tin prepayment arrangement and lower marketing commission secured

 

Operational and Financial Summary for the Year and Quarter ended December 20232

 

Description Units Year ended December 2023 Year ended December 2022 Change Quarter ended December 2023 Quarter ended September 2023 Change
Ore Processed Tonnes 400,691 436,400 -8% 105,510 100,395 5%
Tin Grade Processed % Sn 4.15 3.82 9% 3.98 4.08 -3%
Overall Plant Recovery % 75 75 1% 75 76 -2%
Contained Tin Produced Tonnes 12,568 12,493 1% 3,126 3,104 1%
Contained Tin Sold Tonnes 11,385 12,764 -11% 2,046 3,110 -34%
EBITDA3,4 (FY2023 and Q4 2023 guidance) US$’000 135,541 222,215 -39% 20,321 38,429 -47%
AISC3, 4 (FY2023 and Q4 2023 guidance) US$/t sold 14,259 14,237 0% 14,645 14,625 0%
Dividends paid (cents per share) C$ cps 6 6 0% 0 3 n/a
Average Tin Price Achieved US$/t 26,009 30,636 -15% 25,157 26,557 -5%

__________________________________________________________________________________________

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. 3FY2023 and Q4 2023 EBITDA 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

 

Contained tin production of 3,126 tonnes for the quarter ended December 2023 was in line with the previous quarter. Tin production of 12,568 tonnes for the year ended December 2023 exceeded market guidance of 12,000 tonnes. The Mpama North underground mine continues to deliver ore at tin grades and volumes in line with expectations. The Mpama North processing facility performed well, achieving overall recoveries of 75% during FY2023 (FY2022: 75%).

 

As previously reported, poor road conditions resulting from record heavy rainfall, had a negative impact on truck transit times and export revenue receipts during Q4 2023. The rains have subsided significantly from mid December 2023 with rainfall now averaging ~10% of that recorded in October/November 2023. As a result of increased truck transit times, Q4 2023 contained tin sales of 2,046 tonnes was 1,080 tonnes less than the quarter’s production and resulted in high levels of tin in stock. The delay in tin sales should catch-up during Q1 2024 and accordingly only then report to EBITDA and revenue receipts.

 

Guidance for AISC per tonne of tin sold is US$14,259 and US$14,645 for the year and quarter ended December 2023 respectively. This is in line with that of the prior periods. On-mine operating expenditure increased by 5% compared to the prior year mainly due to a 32% increase in underground development metres at Mpama North and higher diesel prices. Additional Mpama North underground development has resulted in increased developed reserves, higher run-of-mine ore stockpiles and improved future operational flexibility.

 

EBITDA for FY2023 and Q4 2023 is estimated at US$136m (FY2022: US$222m) and US$20m (Q3 2023: US$38m), respectively. The EBITDA variance compared to prior periods is attributable to lower tin prices and a delay in tin sales in Q4 2023 (Q4 sales delay has a ~US$14 million impact on EBITDA for the quarter and year ended December 2023).

 

Alphamin’s audited consolidated financial statements and accompanying Management’s Discussion and Analysis for the year and quarter ended 31 December 2023 are expected to be released on or about March 14, 2024.

 

Mpama South update and production guidance for the year ending December 2024

 

The initial development of the Mpama South underground mine has been completed on time. In addition, the underground development should ensure sufficient developed mineral resources to ensure adequate stockpiles ahead of the processing plant’s commissioning. This should allow for a rapid ramp-up of tin production following plant commissioning. As was previously reported, logistical delays due to poor inbound road conditions have deferred the commencement of processing to the end of March 2024. The processing plant mechanical erection and installation is essentially complete with the main outstanding work relating to completion of the installation of electrical cabling, the installation of instrumentation and the commissioning of the plant.

 

On the basis of incremental tin production from the Mpama South plant from 1 April 2024, we expect contained tin production of between 17,000 tonnes and 18,000 tonnes for the year ending December 2024 (FY2023: 12,568 tonnes).

 

The Mpama South capital expenditure cost to steady state production, including operational readiness costs, are expected to exceed the US$116 million budget by approximately 10% primarily as a result of weather-related delays, higher logistical and import costs as well as minor scope changes.

 

Figure 1: Mpama South portal – ore being trammed to surface

 

 

Figure 2: Gravity processing plant

 

 

Figure 3: Crushing plant

 

 

US$50 million tin prepayment arrangement secured

 

Alphamin is pleased to announce that it has secured a four-year extension (1 October 2024 to 30 September 2028) to its current off-take agreement with the Gerald Group on the basis of a ~60% reduction in tin marketing costs and an up to US$50 million tin prepayment arrangement. The tin prepayment arrangement is effective immediately and may be utilised for tin concentrates in transit but not yet exported as well as up to US$10 million for tin concentrates produced not yet loaded for departure. The facility carries an interest rate of CME 3M Term SOFR plus 5% (calculated at 10,3% currently).

 

Capital allocation

 

Alphamin’s vision is to become one of the world’s largest sustainable tin producers. From a capital allocation perspective, the Board considers the combination of investment in growth, ongoing exploration, and a high dividend yield a robust value proposition. The funding of the Mpama South expansion project, shareholder distributions and DRC income tax payments were a priority during the year ended December 2023. The allocation of capital in FY2024 will be prioritised towards completion of the Mpama South project in Q1 2024, significantly lower DRC income taxes on the basis of large advance provisional payments made during FY2023 and ongoing shareholder distributions. As previously reported, the Company intends to make a final FY2023 dividend decision in April 2024 to align with the timing of holding the annual general meeting of Alphamin Bisie Mining SA (ABM), the Company’s DRC subsidiary, to approve ABM’s annual financial statements and consideration of the declaration of a dividend for distribution to the Company and other minority shareholders.

 

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. He is a Principal Consultant and Director of Bara Consulting Pty Limited, an independent technical consultant to the Company.

Posted January 29, 2024

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