AfriTin Mining Limited (AIM: ATM), an African tech-metals mining company with a portfolio of production, development and exploration assets in Namibia in tin, lithium and tantalum, is pleased to announce its unaudited interim results for the six months ended 31 August 2021.
Financial and Operational Highlights:
- Revenue of £5.1 million, an increase of 468% over the corresponding six-month period ended 31 August 2020 with gross profit margin recorded of 22%;
- Positive free cash flow generated of £560k during the six-month period;
- Cash and cash equivalents of £6.3 million at the period end; debt-free following the remaining 2019 and 2020 convertible loan notes settled during the period;
- Phase 1 pilot processing plant exceeded targets and nameplate producing 368 tonnes of tin concentrate (227 tonnes of contained tin) for the six-month period;
- 313 tonnes of tin concentrate (199 tonnes of contained tin) shipped to offtake partner, Thaisarco, during the six-month period;
- Commencement of Uis Phase 1 expansion project with commissioning expected to be completed Q2 2022;
- Lithium and tantalum test work programmes have been designed to increase the confidence levels of their by-product potential;
- Process flow design for a pilot tantalum concentrate production facility at Uis, with implementation planned for Q4 of 2021; and
- Since the end of the period under review, outline terms for a NAD 90 million (£4.5 million) Senior Secured Term Loan has been agreed with Standard Bank Namibia Ltd subject to final documentation.
Chief Executive Officer’s Statement
Against a backdrop of the COVID-19 pandemic and maintaining the health and safety of all our employees as a priority, the AfriTin team has once again managed to produce an impressive half-yearly performance. The Company has continued to exceed production targets at the Uis Tin Mine, resulting in a marked increase in revenue during the period. Whilst a firm focus has been on exceeding steady-state production and ensuring the Phase 1 pilot processing plant cost base becomes more efficient, attention has also been directed to the potential for additional revenue streams and consolidating our tech-metal exposure. We believe the Erongo region will become a globally significant metallogenic province for new technology metals, allowing for significant revenues and potentially substantial economies of scale within the licence areas and region.
During the period, the operation of the Phase 1 pilot processing plant achieved production of 368 tonnes of tin concentrate (227 tonnes of contained tin), with 313 tonnes of tin concentrate (199 tonnes of contained tin) shipped to our offtake partner Thaisarco, resulting in revenues of £5.1 million. This represents a 468% increase from the corresponding six-month period ended 31 August 2020 with an average tin price achieved of US$ 33 794 and a gross profit margin recorded of 22%. Tin is a critical component of the decarbonisation revolution, and an increased need for semi-conductors has seen the demand for tin increase significantly. On the supply side, COVID-related smelter closures, shipping delays and decades of underspending on exploration and mine development have resulted in supply constraints, the net effect of which is the unprecedented prices that were sustained throughout the period. We expect these strong prices to continue in the period ahead.
With a firm focus on the Phase 2 operation, a key milestone on the Company’s growth path was the publication in May 2021 of the Definitive Feasibility Study (“DFS”) for the expansion of the Uis Phase 1 pilot processing plant. The robust economics of the DFS provides us with an opportunity to increase the production of tin concentrate by 67%, thereby increasing the revenue and profit margin of the current operation while importantly de-risking the expansion of the project into the much larger Phase 2 operation. The expansion project has since commenced with the ordering of long-lead items, the appointment of a project implementation team and engineering detailing to facilitate procurement and fabrication. Post-period end, headline terms for a NAD 90 million (approximately £ 4.5 million) Senior Secured Term Loan were agreed with Standard Bank Namibia Ltd to finance the Phase 1 expansion.
The Company also plans to capitalise on the opportunity to develop additional revenue streams to the Company’s tin concentrate product by expediting the lithium and tantalum by-product test work programmes. The launch of a new technology metal regional expansion programme in the second half of the financial year is a step toward unlocking the potential of a new metallogenic province that is the Erongo region of Namibia. While the current JORC (2012) Ore Reserve estimate over the V1 and V2 pegmatites only considers tin mineralisation, the Company intends to add the potential by-product minerals of tantalum and lithium oxide in due course. In this vein, the period under review saw the commencement of a larger exploration focus with the initiation of 8,000 metre lithium and tantalum exploration drilling programme over the V1/V2 ore body to run over the next 12 months. This will lead to the existing Ore Reserve Estimate for tin to be updated for tantalum and lithium oxide.
In tandem with the exploration focus, lithium and tantalum extraction test work programmes have been designed to increase the confidence levels of their by-product potential. This is a significant step in the movement towards the realisation of additional revenue streams. While optimisation test work continues, the Company will proceed with the process flow design for a pilot tantalum concentrate production facility, with implementation planned for Q4 of 2021.
In May 2021, the Company announced the placing of 216 666 667 ordinary shares to raise £ 13 million (before expenses). The capital raised enables the Company to commence the Phase 1 expansion of our flagship Uis Tin Mine and develop the inherent value of our Namibian licence portfolio through the unlocking of its metallurgy and exploration potential. The 2019 convertible loan notes and 2020 loan notes were also settled during the period.
Namibia continues to be an incredibly gracious host country within which to operate. An overarching theme in all decisions and corporate strategy is the safety, health and wellbeing of all employees and those in the surrounding communities where we operate. We remain conscious of the environment and its people, and this will continue to be built into our corporate DNA as we strive to become a significant African multi-commodity tech-metals producer.
The 2022 financial year continues to be an exciting one for AfriTin. We look forward to updating the market on the expansion of the Phase 1 pilot processing plant which is expected to complete in Q2 2022.
AfriTin Mining Limited
+27 (11) 268 6555
Anthony Viljoen, CEO
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