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 update for the quarter ended June
2023:
- Interim dividend for
FY2023 of CAD$0.03
per share declared
- Tin
production of
3,151
tonnes for the quarter, in line
with the previous period
-
Q2 2023
EBITDA3,4
guidance of
US$35.4m at a tin price of
US$25,587/t (Current tin price: US$28,500/t)
- Mine
expansion
project to increase
annual tin production by 60% progressing well
Operational and Financial
Summary for the Quarter ended
June
20232
Description |
Units |
|
Description |
Units |
Quarter ended June 2023 |
Quarter ended March 2023 |
Change |
Ore Processed |
Tonnes |
99,035 |
95,751 |
3% |
Tin Grade Processed |
% Sn |
4.20 |
4.38 |
-4% |
Overall Plant Recovery |
% |
76 |
76 |
0% |
Contained Tin Produced |
Tonnes |
3,151 |
3,187 |
-1% |
Contained Tin Sold |
Tonnes |
3,068 |
3,161 |
-3% |
EBITDA3,4 (Q2 2023 guidance) |
US$'000 |
35,400 |
41,391 |
-14% |
AISC3, 4 (Q2 2023 guidance) |
US$/t sold |
13,897 |
13,915 |
0% |
Average Tin Price Achieved |
US$/t |
25,587 |
26,432 |
-3% |
__________________________________________________________________________________________
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. 3Q2 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
Alphamin achieved excellent tin production of
3,151 tonnes for the quarter ended June 2023. Year-to-date tin
production of 6,338 tonnes exceeds the run-rate to achieve market
guidance of 12,000 tonnes for the year ending December 2023. The
run-of-mine and crushed ore stockpiles ahead of the processing
plant were at record levels at quarter-end, being 27,439 tonnes at
an average tin grade of 6,74% (Q1: 15,011 tonnes at 5,98%).
Sales volumes of 3,068 tonnes of tin, at an
average tin price of US$25,587/t, were from a timing difference
less than production which impacted the quarter’s EBITDA. Guidance
for AISC per tonne of tin sold is US$13,987, in line with the
previous quarter albeit sales volumes were 3% lower. The expected
EBITDA for the quarter ended June 2023 is US$35.4 million, US$6
million below the previous quarter’s EBITDA of US$41.4 million due
to the lower tin price and delayed sales which should clear during
the next quarter. The current 3-month LME tin price is trading at
~US$28,500/t, 11% above the Q2 2023 price.
Alphamin’s unaudited consolidated financial
statements and accompanying Management’s Discussion and Analysis
for the quarter ended 30 June 2023 are expected to be released on
or about August 17, 2023.
Mpama South development
progress
A total of 1,460m of
underground development at Mpama South has been completed to date,
of which 603m was achieved in Q2 2023 (Q1: 418m). Development has
accelerated during Q2 2023 as additional underground equipment has
arrived on site. During July 2023, the underground development
connecting Mpama North and Mpama South has reached the intersection
point where the new Mpama South adit from surface will connect. The
Mpama South adit has intersected a 6m wide area of extremely poor
ground conditions which is delaying advancement. The adit is now
expected to connect with the Mpama South underground workings
during November 2023, in time for the tramming of ore to the new
processing facility. The year-to-date development metres are in
line with the Company’s updated two-year underground mine plan to
achieve the targeted tin production expansion from FY2024. This
plan requires an additional ~2,000m of underground development at
Mpama South during the six months ending December 2023, which
should be achievable as additional development ends become
available from Q3 2023.
The new processing
facility is progressing well. Following completion of all
procurement, design and engineering, fabrication, earthworks and
substantially all civils, the focus has moved to plant erection and
tracking of steel and equipment in transit. During the quarter, the
fine tin plant structure, primary crusher structure and concentrate
drying and storage building have been erected. The gravity plant is
at first floor level and the secondary crushers on third floor
level. The commissioning of the new processing plant is targeted
for December 2023.
The Alphamin project
team, together with the existing site team, remains focussed on
operational readiness preparation. This primarily involves
recruitment and training of personnel, expansion of the laboratory
and accommodation facilities and infrastructure, and increasing the
supply chain to meet the additional production.
The Mpama South project is expected to increase
annual tin production from ~12,000 tonnes to ~20,000 tonnes.
Funding structure and 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. From a FY2023 capital allocation
perspective, the funding of the Mpama South expansion project, DRC
income tax payments and shareholder distributions remain the
priority.
During the quarter ended June 2023, the
Company’s subsidiary paid US$56 million in final FY2022 corporate
taxes and US$11 million as the first of four instalments towards
provisional FY2023 taxes. At the current tin price, the Company
does not expect a final FY2023 tax payment to be required, which
would ordinarily be due in early 2024. A US$40 million short-term
facility was secured with the Company’s banking institution in the
DRC as bridging finance towards the unusually high tax payments in
2023 (US$26 million utilised in Q2 2023).
By quarter-end, the Company had spent US$75
million cash on the Mpama South project of which US$30 million was
in Q2 2023. The project is forecast to complete within the budget
of US$116 million.
The Alphamin consolidated Net Cash position
decreased by US$75 million during Q2 2023 mainly related to an
aggregate of US$97 million allocated to the Mpama South development
and DRC taxes. Cash on hand amounted to US$51.4 million as at 30
June 2023.
Interim
FY2023 Dividend
Declared
The Board has declared an interim FY2023 cash
dividend of CAD$0.03 per share on the common shares (approximately
US$29 million in the aggregate) (the “Dividend”). The Dividend will
be payable on 25 August, 2023 to shareholders of record as of the
close of business on 11 August, 2023.
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._________________________________________________________________________________________
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 and AISC
guidance for Q2 2023; annual production guidance for 2023; planned
production expansion resulting from Mpama South; and the timing for
commissioning of the processing plant; timing and plans regarding
underground development and the total development cost of the Mpama
South project. 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
Mpama North and Mpama South estimates of the expected mined tin
grades, processing plant performance and recoveries, uncertainties
regarding the underground conditions for development, uncertainties
regarding supply chain and logistics for purposes of Mpama South
equipment deliveries and the impact on the timing thereof,
uncertainties regarding global supply and demand for tin and market
and sales prices, uncertainties with respect to social, community
and environmental impacts, uninterupted access to required
infrastructure and third party service providers, adverse political
and security 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 or other health crises 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
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.
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 and corporate costs. 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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