Higher tin production lifts Alphamin’s shares on AltX

Alphamin Resources is a low-cost tin concentrate producer from its high grade deposit at Mpama North. SUPPLIED

Alphamin Resources is a low-cost tin concentrate producer from its high grade deposit at Mpama North. SUPPLIED

Published Jul 11, 2024


Tin production for JSE AltX-listed Alphamin Resources swung up by 28% to a record 4 027 tons in the quarter period to the end of June with sales volumes for the same period touching 3 245 tons, yielding a 4% rise in earnings before interest, taxes, depreciation, and amortiation (Ebitda) guidance.

Shares in Alphamin, which operates the Mpama high-grade deposit in the DRC’s North Kivu province, lifted up by 4.3% yesterday to close at R15.50.

But the company’s shares on the JSE AltX are down by as much as 7.19% in the past seven days.

Its production for the quarter to end June uplifted by 28% while it expects “increased tin stocks from the expansion expected to clear” in the current quarter.

Alphamin Resources has said that the increase in production for the quarter is a consequence of the Mpama South expansion.

And “with only half the quarter benefiting from the expansion”, the company expects “Q3 to deliver a further increase” in tin production.

This will likely boost its sales for the quarter to September from the 3 245 tons recorded in the June quarter.

Alphamin resources has subsequently bumped up its Ebitda guidance to $54.2 million (R981.6m), up 4% from the prior quarter’s guidance.

“The new Mpama South processing facility has been producing tin concentrate to sales specification since May 14, 2024 and achieved commercial production on May 17, 2024,” said Alphamin.

However, ton sales for the quarter lagged production, resulting in a limited contribution from the expansion to Ebitda for the quarter.

The company’s guidance for all in sustaining costs of $15 576 per ton includes “the incremental Mpama South production” costs.

The quarter-on-quarter increase in the company’s all in sustaining costs was the result of the impact of the higher tin price on royalties, export charges, net smelter returns, and marketing fees.

As a result of an expansion programme undertaken during the quarter, ore processed had strengthened by 52% to 166 675 tons though the tin grade of the feed ore reduced to 3.2%.

This was in line with expectations though, as the expansion programme the company is undertaking is targeting a doubling of processing volumes and reduction in the overall tin grade to 3%.

“The Mpama South facility was originally targeted to produce at a metallurgical recovery of 70% on the basis of a 2% tin feed grade, which should result in a combined recovery of 73% going forward,” said the company.

During the quarter period under review, the company’s new plant had outperformed and achieved recoveries in excess of 70% at an average feed grade of 2.2%.

In January, Alphamin Resources said capital expenditure at the Mpama South project was expected to exceed the budgeted $116m by 10% this year owing to higher logistical and import costs.

Alphamin produces 4% of the global supply of the mineral from the Democratic Republic of Congo (DRC), where its tin production for 2023 was marginally up by 1% at 12 568 tons.