Alphamin Scales Back Tin Output Amid Security Threats in Eastern DRC
JSE-listed Alphamin Resources has reported an 18% quarter-on-quarter decline in high-grade tin concentrate production from its Bisie mine in the Democratic Republic of Congo (DRC) for the first quarter of 2024, following a temporary shutdown due to escalating regional security concerns.
The company produced 4,270 tonnes of contained tin during the quarter ended March 31, down from 5,237 tonnes in Q4 2023.
Operations were suspended on March 13 as insurgent groups advanced westward, reaching within 110 km of the mine. Notably, on March 20, insurgents occupied Walikale, a key town near the project.
Although tin grades in processed ore were 18% higher at 3.55%, Alphamin reduced daily throughput to optimise recoveries, which averaged 75%, exceeding the 73% target.
Due to the interruption, Alphamin’s board opted not to declare a final FY2024 dividend in April. The company began a phased resumption of operations on April 9, after insurgents withdrew eastward toward Masisi, and full production resumed by late April. The mine is now operating normally with all staff on site.
Despite the return to production, Alphamin has lowered its FY2025 tin production guidance from 20,000 t to 17,500 t, anticipating that first-quarter outperformance in ore grade will normalize to the planned average of 3% for the year.
Sales during the quarter totalled 3,863 tonnes, slightly below production due to timing, with most of the inventory sold and exported after quarter-end.
The company recorded an all-in sustaining cost (AISC) of $16,279/t, up 8% from $15,034/t in the previous quarter, reflecting costs incurred during the shutdown, including payroll, care-and-maintenance, and evacuation expenses.
As a result, earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 18% to $61.8-million.
At the end of the quarter, Alphamin held $72-million in cash and $65-million in receivables. By May 12, after settling a $38-million DRC tax payment and reducing its overdraft by $15-million to $38-million, the company’s cash balance stood at $74-million. Exports from the site resumed on May 9.
The company’s $50-million tin prepayment arrangement with Gerald Metals remained unused during the quarter but will be reactivated in Q2.
Additionally, Alphamin renewed its overdraft facility for 12 months, with plans to reduce borrowings to $25-million by May 31, with flexibility to increase it to $53-million under an international guarantee.
The company cautioned that, while operations have stabilised, the security risk remains high, and it will continue to monitor the evolving situation closely.
