TSX-V- and JSE-listed tin mining company Alphamin Resources expects to report a 6% quarter-on-quarter increase in earnings before interest, taxes, depreciation and amortisation (Ebitda) to $167-million for the second quarter.

The higher expected Ebitda is on the back of a 5% quarter-on-quarter increase in the tin price, which averaged $51 957/t in the second quarter, compared with an average of $49 278/t in the first quarter of this year.

For the quarter ended June 30, Alphamin produced 5 013 t of tin and sold 5 014 t of tin, compared with the 5 026 t produced and the 5 016 t of tin sold in the first quarter of the year.

Production remained in line with the targeted guidance of 20 000 t/y.

Alphamin says processing recoveries dipped by 2% from 74.2% in the first quarter to 72.8% in the second quarter. The company attributes this dip to metal sulphides in the current mining area being above average levels, resulting in excessive near gravity material interfering with the efficiency of the gravity circuit.

Moreover, the guidance for all-in-sustaining cost (AISC) for the second quarter is estimated at $19 043/t, up 6% from the AISC of $17 968/t for the first quarter, owing to a combination of off-mine costs in the form of increased royalties, export duties, marketing commissions and net smelter returns, which increase as the tin price increases.

On-mine operating costs increased largely as a result of higher fuel prices impacting on diesel and transport costs. Alphamin points out that fuel stocks have been and remain at full capacity, with higher prices expected to continue into the third quarter owing to ongoing orders at elevated prices.

Additionally, Alphamin highlights that, in terms of the exploration and drilling progress in the Democratic Republic of Congo (DRC), 1 893 m was drilled at the Mpama North tin mine during the second quarter, with three holes completed and a further drill hole abandoned owing to difficult ground conditions.

About 3 653 m was drilled at the Mpama South tin deposit during the second quarter, with five holes completed and a further two abandoned owing to difficult ground conditions.

The company also notes that the Mpama South orebody is hosted in the same north-south trending shear zone as Mpama North, about 300 m to the south, and that second quarter drilling has aimed to target extensions of the defined resource at depth, with three of five completed holes intersecting visible cassiterite mineralisation.

Meanwhile, Alphamin CEO Eoin O’Driscoll notes that the regional security situation at Mpama North and South remains largely unchanged and operations continue as normal.

“In the second quarter, an Ebola outbreak was declared in the Ituri province of north-eastern DRC. While several cases have been reported in North Kivu, there have been none to date in the Walikale health zone, where the mine operates.

“The company has implemented enhanced hygiene and screening protocols and expects operations to continue uninterrupted,” he points out.

Alphamin’s net cash position was $91-million as at June 30, down from $140-million in March after distributions to shareholders of $160-million, including $121-million to shareholders of the company, $26-million to minority shareholders in Alphamin’s subsidiary in the DRC and $13-million in dividend withholding taxes in the DRC and corporate tax payments of $26-million.

The company’s unaudited consolidated financial statements and accompanying management discussion and analysis for the three and six months ended June 30 are expected to be released on or about July 31.