Al­phamin ap­plies to join AltX

• Lo­cal list­ing will con­trib­ute part of the money needed to de­velop Bisie tin mine in Demo­cratic Repub­lic of Congo

Business Day - - FRONT PAGE - Char­lotte Mathews En­ergy and Re­sources Writer math­ewsc@fm.co.za

Al­phamin Re­sources, which is de­vel­op­ing the Bisie tin mine in the north­east­ern Demo­cratic Repub­lic of Congo, had ap­plied for a sec­ondary list­ing on the JSE’s AltX sec­tor as part of its eq­uity fundrais­ing for the project, it said on Tues­day.

Al­phamin Re­sources, which is de­vel­op­ing the Bisie tin mine in the north­east­ern Demo­cratic Repub­lic of Congo, had ap­plied for a sec­ondary list­ing on the JSE’s AltX sec­tor as part of its eq­uity fundrais­ing for the project, it said on Tues­day.

BMI Re­search, part of Fitch Group, fore­casts a rise in global tin prices to $22,500/tonne by 2021 from about $19,500/tonne in 2017 as growth in tin de­mand, driven largely by the elec­tron­ics sec­tor, will out­strip pro­duc­tion. China’s share of global con­sump­tion is ex­pected to rise to 59% by 2021, from 55% at present, while In­dia and Ger­many are also grow­ing strongly.

Al­phamin, whose pri­mary list­ing is on the Toronto Ven­ture Ex­change, has al­ready spent $75m on ex­plo­ration, in­fra­struc­ture and the un­der­ground por­tal and de­cline shaft at Bisie. The mine will have a peak fund­ing re­quire­ment of $172.1m, in­clud­ing $23m as a con­tin­gency.

To date, Al­phamin has raised $140.7m, or 80% of the peak fund­ing re­quire­ment in­clud­ing through a pre­vi­ous eq­uity is­sue, $13.7m from the In­dus­trial De­vel­op­ment Cor­po­ra­tion and $24.7m com­mit­ted by Al­phamin’s 44% share­holder, Tre­mont Master Hold­ings.

This week, Al­phamin signed a $80m credit fa­cil­ity with a con­sor­tium in­clud­ing Sprott Pri­vate Re­source Lend­ing, Barak Fund and Tre­mont.

CEO Boris Kam­stra said it was un­likely that the full $31.4m still to be raised in eq­uity would come en­tirely from the place­ment of shares ahead of the list­ing on the JSE.

Bro­kers have in­di­cated there would be in­ter­est from South African in­vestors for at least $10m. The re­main­der will prob­a­bly be raised in Toronto and from a trader.

Al­phamin’s share price is at C$0.40 ($0.31), hav­ing added 14% on news of the fundrais­ing.

Bisie will de­liver its first tin in 2019 and reach steady-state pro­duc­tion at the end of that year. Progress has al­ready been made on build­ing the un­der­ground por­tal and de­cline as well as the road and airstrip.

The first phase of the mine will de­velop the re­source at Mpama North to pro­duce about 10,000 tonnes of tin a year for 12-and-a-half years. The cash cost per tonne of tin sold will be about $10,359.

At a tin price of about $21,400/tonne, it will de­liver earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion of about $110m a year.

The pay­back pe­riod from first pro­duc­tion is 17 months.

There was po­ten­tial up­side in the fu­ture from dig­ging deeper at Mpama North and ex­ploit­ing a nearby re­source at Mpama South, where ini­tial drilling had been pos­i­tive, Kam­stra said.

Al­phamin has signed a mem­o­ran­dum of un­der­stand­ing with the lo­cal Wa­likale com­mu­nity un­der which it has com­mit­ted to spend 4% of its in-coun­try ex­penses on com­mu­nity de­vel­op­ment.

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