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Quarterly update
Alphamin Resources Corp.
Continued in the Republic of Mauritius
Date of incorporation: 12 August 1981
Corporation number: C125884 C1/GBL
TSX-V share code: AFM
JSE share code: APH
ISIN: MU0456S00006
(“Alphamin” or the “Company”)
QUARTERLY UPDATE
MAURITIUS – August 29, 2019 – Alphamin Resources Corporation (AFM:TSXV, “Alphamin”,
or the “Company”) is pleased to announce financial and operating results for the three and
six months ended June 30, 2019. All financial figures are in U.S. dollars.
Operational Highlights:
- Excellent safety performance with zero lost time injuries during the quarter
- Plant performance and overall recoveries significantly improved post quarter-end to
65% for the month of August 2019 (target of ~72%)
- Commercial production expected during the quarter ending September 2019
- Contained Tin production of 636 tons for the quarter ended June 2019 and monthly
production of 672 tons and 809 tons achieved post quarter-end for July and August 2019
respectively
- Contained Tin production guidance for the six months ending December 2019 of 4,000
– 4,500 tons
- AISC of $10,000 to $12,000 per ton of contained Tin produced guidance for the six
months ending December 2019
- Concentrate sales pipeline full post quarter-end with regular revenue proceeds
- Working capital position strengthened post quarter-end
This news release should be read in conjunction with Alphamin’s quarterly consolidated
financial statements and quarterly highlights for the three and six months ended June 30, 2019,
which is available on Alphamin’s website and on SEDAR. Certain financial information is
reported herein using non-IFRS measures. See Non-IFRS Financial Performance Measures
below and in Alphamin’s accompanying Q2-2019 Management’s Discussion and Analysis.
Operational Summary and guidance to December 2019
A financial summary is not being presented since commercial production has not been
achieved by quarter-end. The following table sets forth selective operational information for
the quarter ended June 30, 2019 and the months of July and August 2019:
Description Units Actual
Quarter Month to Month to
ended 31 July 29 August
June 2019 2019 2019
Tons processed Tons 36 336 29 970 21 083
Tin grade % Sn 4,7 5,4 5,9
Overall Plant recovery % 37 42 65
Payable Tin produced Tons 636 672 809
Payable Tin sold Tons 157 372 650
Operational:
The operation has continued with its excellent safety record with zero lost-time injuries
recorded during the past quarter.
Plant construction was completed during Q2, 2019 and overall processing recoveries
increased significantly post quarter-end due to improved equipment availabilities, operator
upskilling and consistency of feed material to the plant. Tin losses in the circuit have been
identified and process flow changes made to reduce the losses of tin to the fine and ultrafine
flow streams. As a result, the Company achieved an overall recovery of 65% during the month
of August 2019 (compared to design levels of ~72%). Accordingly, the Company expects to
achieve commercial production during Q3 2019.
The grade and tonnages from underground mining have shown a strong correlation to the
Company’s Mineral Resource model. Maintaining the volume of material mined remains under
pressure as the Company awaits delivery of its 3rd drill rig and underground loader in Q4 2019.
The operational team is focusing on maintaining the capital development required to establish
the next set of stopes on levels 5 and 7. The level 5 elevation has been reached and ventilation
ways and services must be established in order for stoping to commence in late Q3 2019.
Stoping operations on level 7 are required to commence in Q1 2020 and the decline is
advancing towards level 6.
Company guidance for the remainder of the financial year:
We expect contained tin production of between 4000 tons and 4500 tons for the six months
ending December 2019 with run-of-mine grades averaging around 5% and overall plant
recoveries in the range of 55% to 70%. The high run-of-mine tin grades planned for the
remainder of the financial year is in accordance with the current mine schedule and is expected
to taper off to around 4% during the year ending December 2020. The Company expects
metallurgical recoveries to stabilise at 65-70% during Q4 2019 and is targeting 70-75% during
2020.
We expect AISC per ton of contained tin to average between $10,000 and $12,000 for the six
months ending December 2019. This is estimated basis a range of actual operating
expenditure recorded during the last three months against a trend of volumes processed,
grade and overall plant recoveries up to August 2019.
Working Capital:
The Company’s working capital position improved considerably post quarter-end due to the
receipt of the Industrial Development Corporation’s pro-rata contribution to previous equity
raises of $4.6m, a VAT refund of $1.5m in the DRC and consistent revenue receipts from much
improved production.
Debt obligations and update:
Commercial production is expected during Q3 2019. The Company is required to commence
with monthly interest and debt service reserve funding on its credit facility on achieveing
commercial production. With the original delay in plant commissioning and the recent tin price
declines, discussions are ongoing with the lenders to amend the repayment profile of the credit
facility which we expect to announce in the coming weeks.
Tin Market:
LME Tin prices have fallen from over $20,000/t during the quarter ended March 2019 to current
levels of around $16,000/t. This followed an apparent reduction in tin demand associated with
challenges faced by the global electronics industry on the back of the US/China and
Japan/South Korea trade wars. The Company’s focus continues on achieving full production
at the lowest possible AISC, which should provide us with a reasonable operating margin
based on current tin prices.
Ebola:
The Ebola epidemic has spread geographically to South Kivu and Goma. To date there have
been no instances near Bisie itself. Alphamin has strict Ebola control measures in place to
enable resident health workers to identify and treat potential and real Ebola cases.
Ebola is a virulent disease, however it can only be contracted if the virus makes direct contact
with the mucous membrane or an open wound of an infected person. A person with Ebola is
only infectious when they have a high fever. Alphamin has temperature monitoring stations at
the entrance to all areas, messes, accommodation areas and other working areas.
Revised life-of-mine plan:
The revised life-of-mine design and scheduling is in process following the previously
announced change in mining method, after which an updated NI 43-101 technical report will
be released.
Leadership Changes:
On 12 August 2019, Mr. Boris Kamstra stepped down as CEO and Mr. Maritz Smith was
appointed. The Board wishes to thank Mr. Kamstra for having taken the Alphamin reigns some
3 years ago when the Company’s Bisie mine was still at a conceptual stage. Mr. Kamstra saw
Bisie through to a fully developed operation. The Board welcomes Mr. Smith to the role of CEO
in leading the Company through its next phases of creating value for all stakeholders.
FOR MORE INFORMATION, PLEASE CONTACT:
Maritz Smith
CEO
Alphamin Resources Corp.
Tel: +230 269 4166
E-mail: msmith@alphaminresources.com
USE OF NON-IFRS FINANCIAL PERFORMANCE MEASURES
This news release refers to the following non-IFRS financial performance measures: Earnings
before interest, taxes, depreciation and amortization (“EBITDA”) and All-In Sustaining Cost
(“AISC”).
These measures are not recognized under IFRS as they do not have any standardized
meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures
presented by other issuers. We use these measures internally to evaluate the underlying
operating performance of the Company for the reporting periods presented. The use of these
measures enables us to assess performance trends and to evaluate the results of the
underlying business of the Company. We understand that certain investors, and others who
follow the Company’s performance, also assess performance in this way.
We believe that these measures reflect our performance and are useful indicators of our
expected performance in future periods. This 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.
Cash Costs
This measures the cash costs to produce a ton of payable tin. This measure includes mine
operating production expenses such as mining, processing, administration, indirect charges
(including surface maintenance and camp), and smelting, refining and freight, distribution and
royalties. Cash Costs do not include depreciation, depletion, and amortization, reclamation
expenses, capital sustaining and exploration expenses.
AISC
This measures the cash costs to produce a ton of payable tin plus the capital sustaining costs
to maintain the mine, processing plant and infrastructure. This measure includes the Cash
Cost per ton and capital sustaining costs divided by tons of payable tin produced. All-In
Sustaining Cost per ton does not include depreciation, depletion, and amortization,
reclamation and exploration expenses.
See “Cautionary Notes Regarding Forward-Looking Statements” below as well as “Use of
Non-IFRS Financial Performance Measures” in our Management’s Discussion and Analysis
for the three months ended June 30, 2019.
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 the terms and intended completion of the Private Placement, the
anticipated use of funds from the Private Placement, the anticipated additional debt drawdown,
the participation of the IDC and other stakeholders, costs of production, success of mining
operations, the ranking of the project in terms of cash cost and production, economic return
estimates, social, community and environmental impacts, and continued positive discussions
and relationships with local communities and stakeholders. 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: Alphamin’s ability to secure sufficient financing to advance and
complete the Project, uncertainties associated with Alphamin’s resource and reserve
estimates, uncertainties regarding global supply and demand for tin and market and sales
prices, uncertainties associated with securing off-take agreements and customer contracts,
uncertainties with respect to social, community and environmental impacts, adverse political
events, uncertainties with respect to optimization opportunities for the Project, 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.
The JSE link to the supporting document is
(https://senspdf.jse.co.za/documents/2019/jse/isse/APHE/ie2019.pdf.)
30 August 2019
JSE Sponsor
Nedbank Corporate and Investment Banking
Date: 30/08/2019 08:00:00
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