Alphamin to complete Bisie project finance with JSE listing

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Boris Kamstra, CEO, Alphamin

CANADIAN-listed junior tin mining company Alphamin Resources is to list on the Johannesburg Stock Exchange’s Alt-X as part of its efforts to raise the final outstanding amount of $31.4m required to push ahead with development of the proposed Bisie tin mine in North Kivu province of the Democratic Republic of Congo (DRC).

Alphamin CEO, Boris Kamstra, revealed this at a briefing to financial media in Johannesburg today hard on the heels of an earlier announcement that the company had just secured an $80m credit facility from a syndicate of lenders. That syndicate includes Sprott Private Resource Lending, Barak Fund SPC and Tremont Master Holdings.

Significant investors in the Bisie project include the Industrial Development Corporation (IDC) which has committed to investing $13.7m at the project level and Tremont which has committed to investing $24.7m into the proposed Alphamin private placement leaving the balance of $31.4m to be raised in Johannesburg and Toronto.

The shares will not be offered to the public in South Africa and will be placed privately with various financial institutions, but its listing on the JSE will give South African investors the opportunity to invest in a junior mining company operating outside of South Africa.

Kamstra commented: “Currently, there is strong demand in the South African market for investment in companies that earn dollar-based revenue, and particularly for investment in mining companies with expected acceptable return metrics”.

He pointed out Alphamin already had strong South African connections through the key suppliers of services and materials to Bisie and an existing relationship with the IDC. “We believe that this knowledge base will position Alphamin well for a secondary inward listing on the AltX,” he said.

During a previous presentation given in August this year, Kamstra focused on the mine to be built saying it was expected to produce an estimated 9,600 tonnes of tin-in-concentrate annually with an initial life-of-mine of 12.5 years.

The orebody is the richest tin deposit in the world running at an average grade of 4.5% and Kamstra estimated average EBITDA (earnings before interest, tax, depreciation and amortisation) at around $110m a year meaning the payback period on the project would be less than two years.

The mine is controlled through an Alphamin operating subsidiary in the DRC in which Alphamin holds 80%; the IDC 15% and the DRC government 5%.

In today’s presentation, Kamstra stressed the Bisie mine would just be the first phase of what could be a series of developments in a new “tin mining province” where initial drilling work had revealed a number of potential high-grade tin deposits – all of them under Alphamin’s control. “We could be mining tin here for the next 60 or so years,” he said.

3 COMMENTS

  1. Kamstra is a solid, hard working, salt of the earth man.
    But the way this project was drilled and the mine designed, is difficult to justify.
    Investors need look no further than Banro, to understand that the smallest mistakes can be lethal in the DRC. Even the crackerjack team at Randgold are having an unusually tough time at Kibali.

    Investors would therefore be well advised to run the numbers for themselves and see if the current valuation is a fair price at which to invest.

  2. Union Miniere di Haut-Katanga, you should take a look at the videos and photos on http://www.alphaminresources.com to see what progress the Alphamin team has made – the team has already solved plenty of difficult problems and your assessment may just be a little dated. What seemed impossible 3 or 4 years ago looks a lot more doable now. And remember with 100%+ margins there is plenty of buffer on this one…

  3. I suspect describing Banro as an example of “the smallest mistakes” might be somewhat of an understatement! Although, to be fair, no project in the DRC is going to be a cake walk – helps to have a grade 4 times the next best project in your commodity though… which is true for Alphamin, but certainly not for Banro.

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