Production from Mpama South will add immense value to Bisie, which is already regarded as a top tin producer in the world. Currently, Alphamin is only mining the exceptionally high-grade tin at Mpama North.
The company invested in and embarked upon an extensive exploration campaign at the end of 2021 to probe further potential at Mpama North; to drill more holes at Mpama South; to understand how these two high-grade deposits are interlinked; and to determine the value of any other occurrence on Alphamin’s land tenement.
The investment paid off and as Alphamin prepares to bring Mpama South online this year, news of a record-breaking 2022 couldn’t have come at a better time for the company, which is already flying high on the back of an acute shortfall in global tin concentrate supply and high spot prices.
Production expansion bodes well for the future
Alphamin said in a statement last year that the opportunity to take advantage of the scarcity of tin concentrate and the ability of Alphamin to self-fund the projects played a critical role in the decision to develop Mpama South over a period of 20 months.
The company remains of the opinion that global tin supply is likely to be constrained during the next five years while demand for tin is expected to increase.
“In light of these market fundamentals, the development of the Mpama South project and consequent planned production expansion of the Bisie complex to approximately 20,000 tonnes of contained tin per year bodes well for future cash flow generation,” says Maritz Smith, CEO of Alphamin Resources.
First tin concentrate is expected to be delivered in December 2023. At full capacity, Mpama South will produce close to 7,232t of tin-in-concentrate annually.
According to a recent statement by the company capital allocation during the financial year 2023 will be prioritized towards the development of Mpama South, while significant progress has been made on the development of Mpama South since March 2022, when the decision to develop the orebody was first taken.
Development progress since March 2022
The underground mine design has been finalized and about 580m of underground development on two levels connecting Mpama North and Mpama South have been completed.
Furthermore, the Mpama South portal geotechnical investigation has been completed and the design finalized. Surface excavation and adit development infrastructure have been completed. Underground portal development got underway at the beginning of this year.
Most of the underground mechanized fleet has arrived on site with the rest of the fleet expected to be delivered over the next couple of months.
Meanwhile, progress on the construction of the Mpama South processing plant is gaining momentum. The design and engineering aspects are 75% complete and 96% of the procurement has been done. Fabrication of structures and plate work is 50% done and 11% of the processing plant has been moved to the site.
The Engineering Procurement Construction Management (EPCM), bulk earthworks, civils and Structural, Mechanical, Electrical and Instrumentation, Piping, and Platework (SMPPEI) contracts have all been awarded.
Both the bulk earthworks and civils teams have mobilized to site and close to 50% of the bulk earthworks and 10% of the civil works have been completed. The SMPPEI construction team mobilization and training have commenced while an advanced team has started building the concentrate drying and product storage building. The main team mobilization is scheduled for March 2023.
All indications are that the Mpama South development project will be completed within the budget of US$116m with commissioning targeted in December 2023. External laboratory assays on the last batch of in-fill drill holes are expected soon after which the updated Mpama South Resource will be finalized and announced to the market.
Alphamin exceeded all expectations in 2022 despite global turmoil and regardless of a highly unpredictable market.
The company achieved record tin production of 12,493 tonnes for the year ended December 2022, exceeding market guidance of 12,000 tonnes. Underground mining performed particularly well with both volumes and tin grades exceeding expectations. The processing plant achieved good recoveries at an average of 75%.
Despite geopolitical tension and the global economic quagmire in the aftermath of Covid-19 in 2022, Alphamin realized its vision of becoming one of the world’s largest sustainable tin producers.
While the company continued to efficiently extract high-grade ore from Mpama North, its extensive exploration program has delivered excellent results and increased the life of mine at Bisie.
A highly mineralized area underground, not previously included in the mineral resource or mine plan due to its structurally complex nature, was successfully mined and processed during Q3 and Q4 2022.
This area delivered ore at good tin grades but contained high levels of sulfides which impacted processing recoveries. Contained tin production of 3,113 tonnes for Q4 2022 was in line with the previous quarter and above market guidance of 3,000 tonnes.
Sales volumes for FY2022 and Q4 were in line with production at an average achieved tin price of US$30,636/t and US$21,436/t, respectively. Alphamin expects contained tin production and sales of approximately 12,000 tonnes for the year ending December 2023.
A top performer on the global stage
Alphamin now produces more than 4% of the world’s mined tin and with more market volatility and political instability expected in 2023, the company could increase that percentage to at least 5 or 6%.
While wild swings in the tin price and logistical constraints have disrupted most tin mines across the globe, Alphamin continued churning out tin unabated.
It was especially the major tin producers in Asia that had a torrid time in 2022, being hamstrung by repeated lockdowns due to Covid-19 outbreaks and severe bottlenecks at some of the major ports. Those woes continued during the latter part of 2022 despite a market recovery and is set to be repeated in 2023, at least for the first half of the year.
With Alphamin’s extraordinary performance over the last two years and an even better performance expected in 2023, it is almost a foregone conclusion that the Bisie complex would become one of the most prolific and highest-grade tin mines in the world.
The combined production from Mpama North and Mpama South will be more than 20,000t of tin-in-concentrate annually from 2024. According to the International Tin Association (ITA) the rapid development of Mpama South will help to narrow the forecast deficits in the tin market over the next decade.
The Ridge at Bisie is about 20km in length of which an extremely small area has been drilled up to now even after the extensive drilling program that got underway late in 2020.
When Bisie was initially developed Alphamin only drilled out a deposit of five million tonnes. The Bisie mine was designed to be a “staged rollout”, where sufficient Resources were identified to support an initial operation with an adequate Life of Mine and acceptable returns. Once operating, further drilling would be carried out with internally generated cash flow.
Alphamin (TSX.V: AFM) has shown that by sticking to the initial strategy, dividends in the long run. The mine continues delivering despite the doom and gloom around it.
