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ALPHAMIN RESOURCES CORPORATION - Alphamin announces Q4 2020 results/ Achieves record fourth quarter EBITDA and production

Release Date: 05/03/2021 17:08
Code(s): APH     PDF:  
Wrap Text
Alphamin announces Q4 2020 results/ Achieves record fourth quarter EBITDA and production

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 Q4 2020 RESULTS/ ACHIEVES RECORD FOURTH QUARTER
                      EBITDA AND PRODUCTION

MAURITIUS – March 5, 2021 – 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 operational
and financial update for the quarter ended December 2020:

- Record EBITDA of $16,7m at a tin price of $18,497/t (Current: ~$24,000/t)
- Record tin production of 2,898 tons, up 13% from the previous quarter
- Abnormal seasonal rains resulted in logistical constraints which negatively impacted Q4
  2020 sales volumes (down 14% from the previous quarter)
- Q1 2021 tin sales guidance of 3,200 tons (Q4 2020: 2,306 tons) on improved road
  conditions
- Commencement of drilling campaign at the adjacent Mpama South deposit
- Fine tin recovery plant construction 80% complete

Operational and Financial Summary for the Quarter ended December 20202

    Description                        Units                   Actual
                                                    Quarter    Quarter
                                                     ended      ended
                                                                          Variance
                                                   December   September
                                                     2020        2020
    Tons Processed                      Tons        93 560      96 086       -3%
    Tin Grade Processed                % Sn           4,2        3,8         10%
    Overall Plant Recovery               %            74          71          4%
    Contained Tin Produced              Tons         2 898      2 563        13%
    Contained Tin Sold                  Tons         2 306      2 695       -14%
    EBITDA                            US$'000       16 748     16 052        4%
    AISC per ton tin sold              US$/t        11 384     10 777        6%
    Tin Price Achieved                 US$/t        18 497     17 436        6%
__________________________________________________________________________________________
1
 Data obtained from International Tin Association Tin Industry Review 2020 2 Production information is disclosed on a 100%
basis. Alphamin indirectly owns 84.14% of its operating subsidiary to which the information relates.

Operational and Financial Performance
Tin production increased 13% to a quarterly record of 2,898 tons and was higher than our
previous market guidance of 2,600 to 2,800 tons. This outperformance was due to better than
expected tin feed grades and plant recoveries. The processing plant performed at an average
recovery of 74% for the quarter, including a record recovery of 77% achieved in December
2020.

Quarterly sales decreased by 14% due to extreme seasonal rains impacting export road
conditions. Weather stations across the export route reported rainfall above 159% of the long-
term mean.

EBITDA for Q4 2020 increased to a record $16,7million, albeit negatively impacted by lower
tin sales volumes. The short dry-season (Jan-March) allows road maintenance to be done and
already road conditions have improved. We expect to sell approximately 3,200 tons of
contained tin during Q1 2021 thereby recouping most of the past quarter’s sales shortfall.

AISC per ton of tin sold in Q4 2020 increased by 6% to $11,384 from the previous quarter. The
increase followed additional outbound road maintenance costs and employee bonus
provisions as well as the impact from lower unit production costs resulting in a reduced
concentrate stockpile valuation.

The LME tin price has increased from approximately US$18,497/t during Q4 2020 to a current
level of ~US$24,000/t, which bodes well for the Company’s 2021 earnings.

The Bisie tin mine recorded zero lost-time injuries during the past quarter.

Alphamin’s audited consolidated financial statements and accompanying Management’s
Discussion and Analysis for the quarter and year ended 31 December 2020 are available under
the Company’s profile at www.sedar.com.

Production and AISC Guidance for the year ending December 20213

Alphamin’s short-term objective is to increase annualised contained tin production from the
current level of 11,000t to 13,000t. This increase is expected from July 2021 following the
commissioning of the previously announced fine tin recovery plant (“FTP”) and a planned
increase of 5% in processed ore volumes.

On this basis, we expect contained tin production of 5,500t in H1 2021 increasing to 6,500t in
H2 2021, which would achieve our annualised production goal of 13,000t thereafter.

AISC per ton of tin sold is expected to increase on the back of higher tin prices as royalties
and marketing fees escalate. Additionally, sustaining capital expenditure will likely be higher
than 2020.
__________________________________________________________________________
3
  Production and sales 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, truck availabilities for tin sales 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.

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 and has not been negatively affected by the Covid-19 pandemic.

Growth Initiatives
The fine tin recovery plant is 80% complete with full commissioning targeted during June 2021.
Estimated expenditure at completion is substantially in line with the budget of US$4.6 million.
The fine tin recovery plant has the potential to increase contained tin production by 5%-10%
effective July 2021.

Drilling at the Mpama South deposit, located only 750m south of the current processing facility,
commenced in December 2020. Drilling has progressed well with 4,152m (20 holes) completed
by 28 February 2021. Our objective is to declare a maiden Mineral Resource during 2021 and
to test the limits of mineralisation on this deposit to depths of up to 500m below surface and
along strike to better understand the potential for establishing another long life, high grade
mine at the Bisie complex. The lead time to convert drill holes to final assays is two to three
months – assays for the first batch of seven drill holes are expected to be completed during
the next week whereafter a market announcement will be made.

While Mpama South could provide an opportunity to increase the production rate and life of
operations at Bisie, an extension of the life of mine at Mpama North (the current producing
orebody) can be confirmed by drilling down-dip and along strike beyond the northernmost
holes drilled in the 2014 drilling campaign. A diamond drilling campaign is planned for 2021
from an underground drilling drive (under development) located on Level 6 at Mpama North.

Further, the 14km long Bisie Ridge, hosting both Mpama North and South, has a plethora of
anomalous geochemical targets for follow up and lies entirely within Alphamin’s tenements. In
this regard, the Company has identified two drill targets for 2021 (in addition to Mpama North
and Mpama South).

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

The JSE link to the supporting document is
https://senspdf.jse.co.za/documents/2021/jse/isse/APHE/Q42020.pdf.

JSE Sponsor
Nedbank Corporate and Investment Banking

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 mining, processing and production and sales volumes, timing
and cost of completion of the Company’s fine tin recovery plant and its impact on production,
the timing and success of additional exploration drilling, and road conditions for the export of
tin produced. 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, uninterupted access to required
infrastructure, 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.

USE OF NON-IFRS FINANCIAL PERFORMANCE MEASURES
This announcement 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.

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 tailings dam construction costs), smelting costs
and deductions, refining and freight, distribution, royalties and product marketing fees. Cash
Costs do not include depreciation, depletion, and amortization, reclamation expenses, capital
sustaining, borrowing costs 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 less concentrate stock movement divided by tons of
payable tin sold. All-In Sustaining Cost per ton 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. The following table reconciles sustaining capital expenditures to
the Company’s total capital expenditures:

Date: 05-03-2021 05:08:00
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