ALPHAMIN Resources needs an improvement in the tin price in order to meet additional monthly debt payments which fall due from July 31, the company said.
Commenting in a March quarter update, the Toronto- and Johannesburg-listed firm said the onset of COVID-19 had driven the tin price to between $13,500 to $14,500 per ton.
Whilst this was high enough to support continued production at Alphamin’s Bisie mine, which is situated in the Democratic Republic of Congo (DRC), higher prices were needed in order to repay a monthly fixed debt capital instalment of about $2.72m over 36 months from July 31 plus interest of $1.3m initially a month.
This is in terms of a recently rescheduled debt aimed at releasing liquidity pressure on the company. Alphamin assumed a tin price of $17,000/t in its technical report for Bisie. “The company continues to focus on achieving its full production targets at the lowest possible unit cost,” it said in its announcement.
June quarter production of between 2,400 and 2,600 tons has been estimated for the June quarter based upon run-of-mine tin grades planned at 4.0% Sn and overall plant recoveries at 72%. This compares to contained tin production of 2,119 tons in the March quarter which was in the mid-point of previous market guidance.
“Tin grades are variable depending on where mining is taking place and tapered off to 3.5% tin during Q1 2020, in line with expectations,” it said. The overall plant recovery of 71% was in line with target and 11% above the previous quarter.
Alphamin said the DRC’s border posts relevant to importing supplies and exporting tin concentrate remained open notwithstanding COVID-19 related restrictions. But it said that the “… situation remains dynamic”.
“Any issue impacting critical flow in our supply chain or that would restrict operations or the availablity of the company’s workforce may negatively affect production and sales activities,” it said.
“During this challenging time it is important that the Company continues producing and selling tin concentrates for the benefit of all our stakeholders, particularly the economy and people of the North-Kivu province, DRC.”
The initial mining plan for Bisie was for production of 9,600 tons of tin-in-concentrate annually over an initial life-of-mine of 12.5 years. The tin price was trading at about $20,000/t in mid-2019.
The situation remains dynamic and
