Alphamin's rise through the ranks of top global tin miners was expected. However, the mine's elevation as a prime mover happened only a year after hot commissioning. This year, Alphamin's mine will challenge Renison, a tin operation in
Alphamin's real strength lies in its superior geology. Moreover, the grades at Alphamin are spectacular and almost unheard of. While there are questions about the DRC as a jurisdiction, Alphamin's management are adept at operating in the DRC and having grades of more than 4% Sn clearly offsets country risk and logistical challenges. Renison, as a direct comparison, for example, operates in a less risky environment but only mines average grades of close to 1.45% Sn. Alphamin recently entered what management referred to as a lower grade area in its underground mine, and still averaged about 3.5% Sn. 'However, the mining team has started moving into higher grade areas already,' Alphamin said in a statement.
Alphamin is currently only mining Mpama North, the orebody historically targeted by artisanal miners. Although some drilling programmes were done with success at a second orebody only 800m away from the processing plant, Mpama South, the size and quality of the orebody remains an unknown. Optimistic geologists believe that Mpama North is only the ears of the hippo, and that the deposit extends far beyond what is currently known, towards Mpama South, which could be even bigger than Mpama North. In addition to Mpama North and Mpama South, Alphamin has identified five more geological targets that it hopes to drill in the future. The immediate goal, however, is to optimise Mpama North and to ensure that the mine operates at full capacity
Free cash allows for investment in growth projects
Alphamin's recent debt reduction and restructuring exercise has given management breathing space and allowed them to invest in several growth projects, including additional exploration drilling. With a strengthened balance sheet and more free cash, the company should be able to invest more into exploration programmes and life-of-mine extensions. According to
A modern mine with a social conscience
In a world where social and environmental concerns top virtual agendas, and affects the bottom line, Alphamin is leading the pack of modern mining companies with a social and environmental conscience. It operates in one of the least developed, most impoverished regions in the world. In addition, the eastern parts of the DRC have been a hotspot for rebel activity in the
'The spirit, drive and dedication to acquire new skills and hospitality of our hosts has been a material component of our success. It gives me great joy to see men who were once manual labourers now sitting behind a wall of computer screens as efficient plant control room operators, and this is just one example of what is possible' said Kamstra.
Rewards in the DRC can be substantial
Ironically, Alphamin's remote location was a great benefit during the Covid-19 pandemic. Because of the limited movement of people in and out the area, the mine remained fully operational throughout the global crisis, although expatriate workers could not fly in and out of the DRC. Many other tin mines around the world were forced to temporarily shut down due to a number of virus outbreaks amongst their ranks.
Investing in the DRC was always going to be controversial. Political and regulatory risks remain a concern, and investors should be aware that certain parts of the country are still regarded as post-conflict fragile regions. However, the rewards in high-risk countries often exceed expectations. In a post-Covid-19 world, there is a strong appetite amongst investors looking for new ground to explore, and the DRC, with its incredibly rich mineral endowment, is expected to become a high growth country in the next few years, despite its challenges.
Kamstra said in his interview: 'We are bullish on the DRC and believe in its potential.'
In a new world of uncertainty, those mining companies that have strong management, that has reduced their debt and are well funded, will thrive. Alphamin ticks all these boxes and it is therefore no surprise that they are looking for new opportunities. They have operated in the DRC for long enough to know what to expect and how to negotiate troubled waters.
Debt reduced with more than 31%
The company recently raised enough funds to slash its debt with more than 31%, resulting in reduced interest rates on the outstanding balance, improved debt covenants and a softer repayment profile. The non-brokered private placement, during which Alphamin issued more than 310 million common shares at a price of
The successful issuing of shares has put Alphamin in a much better position to negotiate improved debt terms with its lenders. The new terms include an interest rate cut from 14% down to just over 10%, and a significant reduction of the company's debt obligations for 2020. It means that Alphamin has moved the required tin price to service their debt from just over
While tin mines throughout the world struggle to find their feet, Alphamin continues chipping away at their short-term goals. The company's two-year strategy to eventually deliver more than 12,000t of contained tin per annum, is well within reach. This of course, will elevate Alphamin and bring them one step closer to become one of the top tin mines in the world.
On the 8th of July,
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