AMN - DRC: Bisie tin production ramps-up

Alphamin Resources has boosted tin production at the Bisie project in DRC during the September quarter to 2,345 tons, an increase of 269% on the previous quarter. This reflected improved plant recoveries and higher tin grades from underground after commercial production was reached in Q3.

Plant recoveries averaged 65% during the months of August and September 2019 against design levels of approximately 72%. During the quarter the average was 56%.

Tin grades mined and processed increased in the quarter to an average 5.6%, but this is expected to taper off to between 4% and 5% during the current quarter.

The company expects contained tin production of between 2,000 and 2,200 tons for the quarter ending December 2019.

During Q3 there were 1,373 tons of tin sold, up from 157 tons in the previous quarter.

Outbound road conditions necessitated the procurement of additional outsourced trucks in order to significantly reduce the current tin concentrate stockpile on-mine. As a result, the company expects much-improved tin concentrate sales during Q4 2019.

The Bisie operations had an excellent safety performance during the quarter with zero lost-time injuries.

In regards to debt obligations, the company's lenders consortium has agreed in principle, subject to a formal amendment to the credit facility, to:

• Remove the requirement to fund a Debt Service Reserve Account for application towards the next debt capital instalment, which would have absorbed approximately US$1.3 million per month from commercial production to March 2020 increasing to US$2.7 million per month thereafter;

• Monthly servicing of interest due on the credit facility (approximately US$1.3 million) is now scheduled to commence end November 2019 (previously from the commencement of commercial production);

• Alphamin has the option to elect to defer the current quarterly debt capital repayments (which commence end March 2020) to a monthly capital repayment schedule (over 36 months) commencing July 2020.

These proposed amendments to the credit facility offer Alphamin the flexibility to better manage its ongoing treasury requirements by deferring up to US$16 million in debt capital repayments during the 2020 financial year, should the need arise. 

For the above amendments to the credit agreement, if implemented, Alphamin will be required to pay an upfront restructuring fee of US$400,000 payable in cash.

Should Alphamin exercise the option during 2020, then a further fee of US$400,000 would be required, payable in cash.

www.alphaminresources.com