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Alphamin provides quarterly update/announces results of updated technical report
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 PROVIDES QUARTERLY UPDATE/
ANNOUNCES RESULTS OF UPDATED TECHNICAL REPORT
MAURITIUS – February 3, 2020 – Alphamin Resources Corp. (AFM:TSXV, “Alphamin”, or the
“Company”) is pleased to provide the following operational update for the quarter ended
December 2019:
- Bridge repair completed and officially opened on 25 January 2020
- Q4 2019 Tin production of 2,235 tons – at the upper end of our guidance range
- AISC per ton of tin produced at US$12,426, in line with previous guidance and including
incremental logistical costs while the bridge was under repair, arsenic penalties and
underground fleet additions
- Step change in processing recoveries to 70% following plant modifications
- Excellent safety performance with zero lost time injuries during the quarter
- Updated 43-101 document completed following change in mining method
This news release does not include Alphamin’s audited consolidated financial results for the
year and three months ended December 31, 2019 which is expected to be released by the end
of March 2020. Certain financial information for the quarter ended December 2019 is reported
in this news release using non-IFRS measures and is unaudited. See Non-IFRS Financial
Performance Measures below.
Operational Summary for the Quarter ended December 2019
The following table sets forth selective operational information for the quarter ended December
31, 2019:
Description Units Oct-19 Nov-19 Dec-19 Quarter Quarter Variance
ended ended
December September
2019 2019
Tons processed Tons 23 265 23 710 24 584 71 559 74 427 - 4%
Tin grade % Sn 5.3% 5.0% 4.4% 4.9% 5.60% -12%
Overall Plant recovery % 53% 70% 69% 64% 56% 14%
Payable Tin produced Tons 659 827 750 2 235 2 345 - 5%
Payable Tin sold Tons 599 496 13 1 109 1 373 -19%
AISC per ton payable US$ 12 426 11 168 11%
Tin produced
The Bisie tin mine has continued with its excellent safety record with zero lost-time injuries
recorded during the past quarter.
Contained tin production of 2,235 tons was in line with our market guidance and followed a
step change in processing recoveries to ~70% (ultimate target: 72%) during November and
December 2019. Tin grades are variable depending on where mining is taking place and
tapered off to 4.9% during Q4 2019, in line with expectations.
Our Q4 2019 AISC per ton of payable tin produced was US$12,426, negatively affected by
US$447/t of incremental logistical costs incurred while the bridge was under repair and smelter
penalties for high levels of arsenic in concentrate of US$625/t. AISC includes capital
expenditure of US$515/t related to underground LHD (load, haul, dump machine) fleet
additions.
Arsenic levels in ore mined have reduced significantly during January 2020 resulting in low
levels of arsenic in concentrates produced post quarter-end. Irrespective, laboratory test work
and mineralogical investigations have revealed that a relatively simple addition to the reagent
suite is expected to deal with high levels of deleterious arsenic in the final concentrate. Delivery
of the new reagent suite has been delayed due to logistical constraints and now targeted for
February 2020.
The repair work on the previously reported collapsed bridge on the main national road has
been completed by the national road agency and the bridge was officially opened on 25
January 2020.
Company Guidance for the next Quarter and remainder of the Financial Year:
We expect contained tin production of between 9,000 and 10,0001 tons for the year ending
December 2020 with run-of-mine tin grades averaging 4% and overall plant recoveries at 72%.
Contained tin sales should be approximately 2,000 tons higher than production as we re-
instate outbound logistics following the bridge collapse in Q4 2019.
We expect AISC per ton of contained tin produced of between US$10,000 and US$12,0001 2
for the year ending December 2020.
For the quarter ending March 2020, we expect contained tin production of between 2,000 and
2,200 tons. Mining, and consequently tin production, is currently constrained following a delay
in delivery of a new LHD loader which only crossed the repaired bridge on 25 January 2020.
The LHD has remote controlled functionality which is required to load ore blasted using our
new mining method and should be commissioned for operations by mid February 2020.
Tin Market:
LME Tin prices are currently trading in a range between US$16,000/t and US$18,000/t. The
decrease in prices from the 3-year historic average of US$20,000/t followed a 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 recent coronavirus outbreak in China has
had a negative impact on base metal prices including tin. The Company continues to focus on
achieving full production at the lowest possible AISC, which should provide us with a robust
operating margin based on current tin prices.
Life-of-mine optimisation plans:
The Company is pleased to announce positive results from the updated Life of Mine (“LOM”)
plan for its Mpama North Mine, including an updated Mineral Reserve Estimate incorporating
the transition from Sub Level caving (“SLC”) to a Long Hole Stoping (“LHS”) mining method.
The decision to transition from SLC to the LHS mining method was made to reduce safety and
technical risks associated with SLC in the underground environment encountered at Mpama
North. The Company appointed Sound Mining Solutions (“SMS”) to compile an Updated NI 43-
101 technical report, which is expected to be publicly filed shortly.
Highlights from the updated NI43-101 Technical Report:
- Twelve year LOM maintained (2020-2032), based on current Proven and Probable Mineral
Reserves;
- Proven and Probable Mineral Reserves of 3.33Mt at a grade of 4.01% containing 133.4kt
of tin;
1 Production and cost guidance is based on certain estimates and assumptions, including but not limited to: Mineral Resources
and Mineral Reserves, geological formations, grade and continuity of deposits and metallurgical characteristics and operating
costs
2 Cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, as noted
above, commodity prices (2020 - Sn: $17,000) and operating costs. All figures in are in US$ unless otherwise noted.
- The Mpama North Mineral Resource remains open down dip, as well as along strike below
Level 9. Development drilling in these areas is expected to commence Q1 2021 and has
the potential to increase the resource base whilst infill drilling has the potential to convert a
further portion of the existing Inferred Mineral Resources to the Indicated Mineral Resource
category. The combined effect of the planned drilling could result in an extension of the
LOM;
- Average forecast annual contained tin production of approximately 11,080 tons over the first
9 years LOM (2020 to 2028); and
- Average operating cash costs of US$9,451 per ton and all in sustaining cash costs (“AISC”)
of US$9,817 per ton (2020 to 2028)
As part of the Company’s three-year objective to produce over 12,000 tons of contained tin per
annum, a resource drilling and conceptual small-scale development plan is being finalised for
the Company’s Mpama South prospect, located approximately 1.5km south of the Mpama
North mining complex. The resource drilling and study campaign is budgeted at US$2.7 million
for the 2020 financial year. The potential accelerated development of Mpama South would
allow the Company to fully utilise excess capacity in the process plant should the campaign
confirm an economically viable project. Viability of the Mpama South project will depend on
the size and tin grade of the deposit, which will only be known upon completion of the resource
drilling, assaying and modeling.
In pursuit of further optimising overall tin processing recoveries to above the targeted level of
72%, the Company has initiated a program for the procurement and installation of a fine tin
recovery solution during the 2020 financial year.
Qualified Person
Mr. Vaughn Duke Pr.Eng. PMP, MBA, B.Sc. Mining Engineering (Hons.), is a qualified person
(QP) under NI 43-101 and has reviewed and approved the scientific and technical information
contained in this news release. He is a Principal Consultant, Partner and Director of Sound
Mining, an independent technical consultant to the Company.
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 measure: All-In
Sustaining Cost (“AISC”).
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 a similar measure presented
by other issuers. We use this measures internally to evaluate the underlying operating
performance of the Company for the reporting periods presented. The use of this measure
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 this measure reflects 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 September 30, 2019.
3 February 2020
JSE Sponsor
Nedbank Limited (acting through its Corporate and Investment Banking Division)
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 costs of production, production volumes and anticipated tin grades and
processing recoveries. 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 associated with Alphamin’s resource and reserve estimates, uncertainties
regarding estimates of the expected mined tin grades and tin produced, general mining risks,
processing plant performance and recoveries, events causing actual operating expenditure to
be different to that forecasted, uncertainties regarding global supply and demand for tin and
market and sales prices, uncertainties with respect to social, community and environmental
impacts, adverse political events, uncertainties with respect to optimization opportunities for
the mine, uncertainties with respect to the impact of the announced bridge collapse on liquidity
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.
Date: 03-02-2020 05:24:00
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