A RECOVERY in the price of tin to about $17,000 per ton “boded well”, said Alphamin which recently restructured its balance sheet in order to break-even at a metal price of $13,000/t.
Alphamin developed the Bisie tin mine in the Democratic Republic of Congo (DRC) before running into technical delays and then experiencing the misfortune of the collapse of a nearby bridge which was important to mine access.
These events, combined with a decline in the tin price, resulted in the company issuing $35m in shares in order to cut debt a third and lower interest payments. It also changed its debt maturity profile. Bisie was originally designed at a break-even price of $17,000 per ton of tin.
Commenting in a second quarter update – in which the group also reported improved production from Bisie – it said: “The tin price has recently increased to around $17,000/t compared to a price achieved of $15,359/t during this past quarter, which if maintained bodes well for the next quarter’s EBITDA (earnings before interest, tax, depreciation and amortisation) and cash flow generation”.
Production for the second quarter of 2,739 tons was 29% higher than in the first quarter and better than market guidance. The production increase was due to better than expected tin feed grades, the company said. The all-in sustaining cost per ton of payable tin sold reduced by 13% to $10,849 mainly attributable to increased tin production.
As a result, EBITDA for the second quarter of $12.9m was achieved, a margin of 32% “… in a relatively low tin price environment”.
Alphamin forecast contained tin production of 2,600 to 2,800 tons for the third quarter. So far, production and concentrate sales had not been affected by the COVID-19 pandemic.
Bisie has an average production target of about 9,600 tons of tin-in-concentrate annually over an initial life-of-mine of 12.5 years.
Alphamin said in April that in order to establish some long-term sustainability, it was pressing ahead with plans to take production to 12,000 tons of contained tin per year whilst extending Bisie’s life of mine.