PROFIT & LOSS

Alphamin tips 56% EBITDA boost on tin uptick

Tin producer Alphamin Resources has pointed to a 56% boost in earnings for the third quarter, thanks to increased production at its high-grade mine in the Democratic Republic of Congo and a soaring tin price.

 Processing recoveries also improved at Alphamin’s Bisie tin operation in the DRC

Processing recoveries also improved at Alphamin’s Bisie tin operation in the DRC

Alphamin put EBITDA guidance at US$53 million and said it had moved to a net cash position at September 30.

It had reported June quarter EBITDA of $34.1 million, at a tin price of $28,308 per tonne, and had ended that period with net debt of $29.5 million.

Tin has risen 125% since March 2020 and is near the all-time record of $36,770/t reached in September, due to supply constraints and increasing demand particularly from consumer electronics.

Alphamin produces about 4% of the world's tin supply from its majority-owned Mpama North underground mine at the Bisie project in the DRC.

It said contained tin production for the September quarter of 2,832t was 17% above the previous quarter, with underground mining practices relating to stope planning, delineation and blasting significantly improved from mid-July.

"This resulted in an average tin grade of 3.8% processed during August and September 2021 with an average of 3.5% for the quarter," Alphamin said.

The company had reduced second half production guidance in August from 6,500t to 5,500t due to the temporary "lower grade window" of 3.2-3.5%.

Run-of-mine volumes and waste development increased by 5% quarter-on-quarter and the newly-commissioned Fine Tin Plant increased overall processing recoveries by 5% to 75%, it said.

The company said it intended to fully settle the outstanding senior loan of $36 million during October and would set "an appropriate treasury strategy" this quarter, to balance capital allocations between ongoing exploration drilling, the potential fast-track development of Mpama South and shareholder distributions.

Alphamin is aiming for an initial resource by year-end at Mpama South, where it's been reporting high-grade drilling results including 3.2m at 9.59% tin from 173.7m in July.

Alphamin's Toronto-listed shares (TSX: AFM) are trading around a 15-year high and closed up 7.3% yesterday to C88c, valuing it at $1 billion (US$0.8 billion).

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