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Alphamin announces record quarterly tin production/ Q2 2022 EBITDA guidance of US$66.5m/ Dividend declared
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 ANNOUNCES RECORD QUARTERLY TIN PRODUCTION/ Q2 2022 EBITDA
GUIDANCE OF US$66.5m/ DIVIDEND DECLARED
MAURITIUS – 5 July, 2022 – Alphamin Resources Corp. (AFM:TSXV, APH:JSE
AltX)( “Alphamin” or the “Company”), a producer of 4% of the world’s mined tin (1) from its high
grade operation in the Democratic Republic of Congo, is pleased to provide the following
operational update for the quarter ended June 2022:
- Record quarterly tin production of 3,180 tonnes
- Q2 EBITDA (4) guidance of US$66.5m
- Interim dividend for FY2022 of CAD$0.03 per share declared
- Strategic Review update
Operational and Financial Summary for the Quarter ended June 20222
Description Units Actual
Quarter ended Quarter ended Change
June 2022 March 2022
Ore Processed Tonnes 112 569 105 565 7%
Tin Grade Processed % Sn 3,65 3,73 -2%
Overall Plant Recovery % 77,3 77,7 -1%
Contained Tin Produced Tonnes 3 180 3 061 4%
Contained Tin Sold Tonnes 3 229 3 336 -3%
EBITDA (3,4) (Q2 2022 guidance) US$'000 66 500 98 104 -32%
AISC (3,4) (Q2 2022 guidance) US$/t sold 14 800 15 782 -6%
Net Cash (4) (Cash less debt) US$'000 138 100 129 775 6%
Tin Price Achieved US$/t 35 500 43 834 -19%
____________________________________________________________________________________________________
(1) Data obtained from International Tin Association Tin Industry Review Update 2021
(2) Production information is disclosed on a 100% basis. Alphamin indirectly owns 84.14% of its
operating subsidiary to which the information relates. Totals may not add due to rounding
effects.
(3) Q2 2022 EBITDA and AISC represent management’s guidance.
(4) This 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 – Q2 2022
Contained tin production of 3,180 tonnes represents a quarterly record, 4% above the previous
quarter. Underground mining and processing plant recoveries were in line with expectations.
Year-to-date contained tin production of 6,241 tonnes exceeded the run-rate to achieve market
guidance of 12,000 tonnes for the year ending December 2022.
AISC per tonne of tin sold is expected to decrease by 6% to US$14,800 following a 4%
increase in production and the impact of lower tin prices on off-mine costs related to product
marketing fees, royalties, export duties and smelter payables.
EBITDA for Q2 2022 is estimated at US$66.5m (Q1: US$98m) at an average achieved tin price
of US$35,500/t (Q1: US$43,834/t). In addition to a higher tin price, the previous quarter’s sales
volumes included a catch-up from delayed sales during Q4 2021.
The Alphamin consolidated Net Cash position increased by US$8,3 million during Q2 2022 to
US$138.1 million. This increase is after a FY2021 corporate tax payment of US$43.5 million
to the DRC government in April 2022.
Alphamin’s unaudited consolidated financial statements and accompanying Management’s
Discussion and Analysis for the quarter ended 30 June 2022 are expected to be released on
or about 26 July 2022.
Interim FY2022 Dividend Declared
The Board resolved to declare an interim FY2022 cash dividend of CAD$0.03 per share on
the common shares (approximately US$30m in the aggregate) (the “Dividend”). The Dividend
will be payable on 5 August 2022 to shareholders of record as of the close of business on 22
July 2022. Dividend distributions will be considered semi-annually based on excess free cash
after taking account of capital funding requirements, including for the new Mpama South
expansion project.
Strategic Review Update
On 9 November 2021, the Company announced the initiation of a strategic review to explore
alternatives such as fast-tracking the Company’s expansion and life-of-mine extension
potential, balance sheet restructuring including revenue prepayments and streaming,
shareholder distributions or a corporate merger or sale transaction.
The Company wishes to update shareholders and other market participants on this initiative:
1. Exploration drilling doubled from Q4 2021 to a quarterly average of over 12,000 metres
and delivered an additional 124,700t contained tin in inferred Resource and 21,400t
contained tin in indicated Resource at Mpama South. In addition, multiple high-grade
tin intercepts were reported from drilling at depth at Mpama North.
2. Mine development of the adjacent Mpama South deposit commenced, which is
expected to increase annual contained tin production from the current 12,000tpa to
~20,000tpa, approximating 6.6% of the world’s mined tin, effective FY2024.
3. Dividend distributions commenced in February 2022 (Final FY2021 dividend) and net
cash increased from US$1m to US$138m during the 9 months ended June 2022. A
strong balance sheet to support growth initiatives whilst achieving high dividend returns
to shareholders is considered a robust value proposition.
4. The Company is of the opinion that global tin supply is likely to remain constrained for
at least the next five years while demand for tin is expected to increase. In addition to
the development of Mpama South, the Company’s vision is to discover more tin
deposits on its license areas with a view to deliver additional mine developments and
incrementally increase tin supply into an expected widening market deficit.
5. At this point in time, the Company believes that an outright sale transaction would not
deliver the future value it intends to unlock through ongoing resource development and
production growth.
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 4166
E-mail: msmith@alphaminresources.com
JSE Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
5 July 2022
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 for Q2 2022, the expectation of tin
production from Mpama South and first tin production targeted date, expected global tin supply
constraints and a widening global tin market deficit during the next five years as well as the
intention to discover more tin deposits on its license areas with a view to deliver additional
mine developments and incrementally increase tin supply. 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 estimates of the expected mined tin
grades, processing plant performance and recoveries, uncertainties regarding global supply
and demand for tin and market and sales prices, effects of inflation, global supply chain and
other possible disruptions and delays which may impact the Mpama South development
schedule and time to completion as well as the cost to complete development, uncertainties
regarding exploration outcomes on the Company’s license areas and the timing thereof,
uncertainties with respect to social, community and environmental impacts, uninterupted
access to required infrastructure and third party service providers, adverse political and
geopolitical 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 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. 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.
Date: 05-07-2022 03:30:00
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