Tin producer Alphamin Resources expects to report earnings before interest, taxes, depreciation and amortisation (Ebitda) of $34-million for the second quarter, at a tin price of $28 326/t, versus the current $31 800/t.
The Ebitda guidance benefitted from a significant catch-up in tin sales following logistical bottlenecks during the fourth quarter of 2020, and tin prices are currently trading at around $31 800/t, 12% above prices achieved during the past quarter.
Contained tin production was 2 412 t, or 11% below prior guidance and 8% below the prior quarter, and was impacted by a low feed grade of 3.2% tin, compared with 3.8% in the previous quarter.
June, meanwhile, saw lower-than-expected grades from underground, though Alphamin said on July 6 that the “variable nature of tin mineralisation” in the orebody may cause large fluctuations in delivered grade.
As a mitigating tool, Alphamin will increase planned waste development for the remainder of the year in order to provide more mining flexibility for blending high- and low-grade areas.
Taking into consideration the lower feed grade, the processing plant performed well during the period, treating 12% more material and achieving recoveries of 72%.
Net debt amounted to $29.9-million at June 30, down 50% from the start of the financial year, Alphamin said.
Alphamin’s unaudited consolidated financial statements are expected to be released next month.
GROWTH INITIATIVES
Alphamin’s Fine Tin Recovery Plant (FTP) is fully commissioned and produced at steady state from June 26.
Expenditure at completion is substantially in line with the budget of $4.6-million, Alphamin said, noting that production from the FTP during its first week of operations increased overall contained tin production by 5%.
“This exceeded expectations so early after commissioning,” the miner commented.
It added that the “exceptionally high grade” of the FTP concentrates provide further scope to reduce product grade in pursuit of higher tin recoveries.
Meanwhile, Alphamin’s exploration initiative aims to extend the life-of-mine at its currently producing Mpama North operation; declare a maiden mineral resource for Mpama South; and discover at least one additional orebody on the highly prospective Bisie Ridge.
Drilling at the Mpama North orebody started on July 2, and an initial 15 000 m drilling campaign over four months is planned to test the strike and dip extension of the current producing orebody, below 400 m in depth from the mine portal.
The Mpama South Phases 1 and 2 drilling of 10 015 m have been completed with external assays for 29 holes announced to date.
The remaining external lab assays are expected in two batches during July and early August.
Phase 3 drilling of 6 800 m is progressing to plan, Alphamin said, noting that, to date, five of the 24 holes have been completed, showing strong visual mineralisation over wide intercepts within the interpreted high-grade shoot.
In addition to Mpama North and Mpama South, drilling on the highly prospective Bisie ridge is expected to start in August.