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ALPHAMIN RESOURCES CORPORATION - Alphamin exceeds second quarter guidance and achieves record production and EBITDA

Release Date: 08/07/2020 15:03
Code(s): APH     PDF:  
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Alphamin exceeds second quarter guidance and achieves record production and EBITDA

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 EXCEEDS SECOND QUARTER GUIDANCE AND ACHIEVES RECORD
                            PRODUCTION AND EBITDA

MAURITIUS – July 8, 2020 – Alphamin Resources Corp. (AFM:TSXV, APH:JSE AltX, “Alphamin” or
the “Company”) is pleased to provide the following production and EBITDA update for the quarter
ended June 2020:

-   Tin production up 29% to 2,739 tons versus previous quarter
-   AISC per ton of tin sold down 13% to US$10,849 versus previous quarter
-   EBITDA of US$12,9 million
-   Q3 2020 production guidance of 2,600 - 2,800 tons contained tin

Production and Financial Summary for the Quarter ended June 20201

Description                           Units                    Actual

                                                  Quarter     Quarter
                                               ended June       ended    Variance
                                                    2020   March 2020

Tons processed                        Tons         91 928      85 060         8%
Tin grade                             % Sn            4,3         3,5        23%
Overall Plant recovery                   %             69          71        -3%
Payable Tin produced                  Tons          2 739       2 119        29%
Payable Tin sold                      Tons          2 613       3 860       -32%
EBITDA                              US$'000        12 900      12 602         2%
AISC per ton sold                    US$/t         10 849      12 425       -13%
Tin Price achieved                   US$/t         15 359      15 553        -1%

Tin production increased 29% to a quarterly record 2,739 tons and was higher than our previous
market guidance due to better than expected tin feed grades. Plant throughput increased 8% to
91,928 tons from higher underground volumes derived from the new mining method. During the
quarter, mined volumes exceeded plant throughput by some 4,000 tons increasing the run-of-mine
stockpiles. The processing plant is performing well and various initiatives aimed at achieving
consistently higher throughput are underway.

The all-in sustaining cost per ton of payable tin sold reduced by 13% to US$10,849 mainly
attributable to increased tin production. Additionally, the previous quarter’s costs were negatively
affected by high arsenic penalties and exceptional logistical costs incurred while the national road
bridge was under repair.
__________________________________________________________________________________________
1
 Production and financial information are disclosed on a 100% basis. Alphamin indirectly owns 80,75% of its operating subsidiary to
which the information relates.

EBITDA of US$12,9 million was recorded at an average tin price of US$15,359/t. This represents an
EBITDA margin of 32% in a relatively low tin price environment.
The Bisie tin mine recorded two lost-time injuries during the past quarter. An employee and a
contractor sustained minor injuries during two separate accidents - both will return to work on 10
July 2020.

Production Guidance for the next Quarter:

We expect contained tin production of between 2,600 and 2,8002 tons for the quarter ending
September 2020. The tin price has recently increased to around US$17,000/t compared to a price
achieved of US$15,359/t during this past quarter, which if maintained bodes well for the next
quarter’s EBITDA and cash flow generation.

Covid-19 Pandemic and Impact on Operations:

The health of our employees is of paramount importance and in this regard the Company has a
range of Covid-19 awareness, prevention and other risk mitigation controls in place.

To date, the Company has been able to continue with normal production and concentrate sales
activities.

Alphamin’s unaudited consolidated financial statements and accompanying Management’s
Discussion and Analysis for the quarter ended 30 June 2020 are expected to be released on or about
7 August 2020.

Qualified Person

Mr Vaughn Duke Pr.Eng. PMP, MBA, B.Sc. Mining Engineering (Hons.), 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, Partner and Director of
Sound Mining Solutions, 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

2
  Production guidance is based on certain estimates and assumptions, including but not limited to: quantity of material processed, tin
grades of processed material and processing recoveries and assumes mining operations will continue to be conducted in the same
manner as the previous quarter and will not be further impacted by the Covid-19 pandemic.


JSE Sponsor
Nedbank Corporate and Investment Banking

USE OF NON-IFRS FINANCIAL PERFORMANCE MEASURES

This Quarterly Update 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.

EBITDA

EBITDA provides insight into our overall business performance (a combination of cost management
and growth) and is the corresponding flow drivers 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. EBITDA is profit before net finance expense, income taxes and
depreciation, depletion, and amortization.

AISC

This measures the cash costs to produce and sell a ton of payable tin plus the capital sustaining
costs to maintain the mine, processing plant and infrastructure. 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, royalties
and capital sustaining costs divided by tons of payable tin sold. All-In sustaining cost per ton sold
does not include depreciation, depletion, and amortization, reclamation, borrowing costs and
exploration expenses.

Sustaining capital expenditures are defined as those expenditures which do not increase payable
mineral 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.

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 anticipated 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, processing plant performance and recoveries,
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, 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.
Date: 08-07-2020 03:03:00
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