Alphamin’s tin mine in the DRC is making strides and Wall Street should be taking note.
A new breed of investor is moving and shaking Wall Street’s foundations. Amateur day-traders took aim at elite short sellers on Wall Street recently and transformed investor behaviour in an instant… maybe forever. Whether the week-long digital siege of capitalism’s holy grail will be a game-stopper, is yet to be seen. What it has done, however, is shown that the new normal will remain highly unpredictable and volatile. Furthermore, the episode has reaffirmed the age-old adage that a company’s share price is driven partly by sentiment. To what extent the spat between a new generation and the establishment at Wall Street will change investor behaviour is a wild guess, at least for now. But one thing is for sure, the young guns are at the gate, and they are prepared to bring down the house. With pockets full of money and a swagger in their step, they trample convention unashamedly. Moreover, they do it by zoning in on a public sphere remoulded by the Coronavirus pandemic. The new kids on the block are prepared to back outsiders with substance, and puts a gobsmacking spin on risk, returns and ratios.
Nothing but the hound dogs
The question is whether the establishment should be scared? Is this the end of the road for traditional trading and investment as we know it or is it merely a conundrum to be ironed out once the Covid-19 pandemic has washed the global economy’s dirty clothes. Whatever the outcome, companies with real value should not throw out the baby with the bathwater. Not yet. In fact, the unconventional post-millennial, post-Covid-19 approach should be embraced, not shunned. In the wasteland laid bare by the thaw after the Covid-19 freeze, there are bloodhounds sniffing around for good deals. And they are not scouring the surface of the old world. They are looking for the brave and the bold. New technology, new ventures, and new minerals make them tick. Although good old-fashioned fundamentals still carry considerable weight, high-risk-high reward is the new name of the game. This might sound like Russian roulette to some, but it is worth trying to tube a perfect Covid-19 infused wave of optimism. In a post-2020 half sane world the ultimate show-stopper for any scrolling, would-be investor, should be a fusion between the old and the new; high risk…unconventional… but backed up by old school fundamentals. Once sanity prevails, and Covid-19 loses its sting, Alphamin Resources’s tin mine, in the Democratic Republic of the Congo (DRC), will be the ideal prey for the new hound dogs.
Tin is red-hot
Tin is a new-world mineral. The growing number of applications in green technology and electric vehicles have spurred demand over the past few years. The silvery-white metal is a critical component of high-tech hardware, robotics, and is used extensively in the renewable energy space. Not only that, but the tin price has been red-hot over November and December last year, and continuously hit the beat in the new year, despite global volatility, Covid-19 restrictions, and market uncertainty. The 2020 market shake-up, and more recent geopolitical and logistical constraints in traditional strong tin producers in Southeast Asia, especially in China, Indonesia, South America and Myanmar, fits Alphamin like a glove. Excessive rainfall, border closures because of rising Covid-19 infections, and political strive have contributed to the intermittent, and at times erratic, supply from the east, and more and more off-takers have turned their gaze towards high grade tin producer, Alphamin (TSX: AFM). Its location deep within the eastern forest of the Congo basin, makes its Bisie mine one of the most isolated mines in the world. The health impact of Covid-19 on the mine and its employees was, until now, negligible. Mpama North (Alphamin’s main ore body) continued to churn out a steady supply of tin and feeding a resource deprived market, even during the worst of Covid-19 lockdowns. Alphamin ticks all the boxes for the post-Covid-19 investor: just enough risk to up the heart rate slightly; solid fundamentals to steady a morning tremble; a management team that has walked the talk; a new mineral that is a perfect fit for a green future, and an operation that has improved the fate of their host communities significantly.
Post Covid-19 blue skies
Alphamin’s exceptional high grade tin product (at an average of close to 4.5%) and astonishing blue-sky potential should be a conversation starter at any future investor event. Since production at Mpama North got underway in April 2019, the mine has rarely extracted tin at a head-grade of less than 4%. At its absolute worst, the head grade dropped to 3.8%. At these grades, Alphamin is recognised as one of the top tin mining operations in the world in terms of grade.
Even more intriguing is Alphamin’s geological puzzle. Mpama North, the deposit currently being mined, has been nothing less than stellar and all predictions are that the other major deposit, Mpama South could be even bigger. The growing bulge, and possibilities, at Mpama South, is endless and should get toasted, not only in the DRC, but globally. Bisie, with extensions to Mpama North and Mpama South, at full tilt, will be much more than a game stopper, it will also extend the life of mine. Alphamin has proven, beyond a shadow of a doubt, that Mpama North has substance and value. What is more, they have put their trust in exploration and geology to, hopefully, eventually prove up Mpama South and other surrounding deposits.
Drilling at the Mpama South deposit, located only 750m south of the current processing facility, commenced in December 2020. Two drilling campaigns are scheduled on Mpama South for 2021. Phase 1 is planned as a 6,000m diamond drilling campaign to be executed from December 2020 to March 2021. Subject to positive drill results, Alphamin expects to declare a maiden Mineral Resource during Q2 2021. Phase 2 of the Mpama South drilling program is planned as a 2,500m diamond drilling campaign to be executed during Q3 2021.
This second phase of drilling is aimed at testing the limits of mineralisation on this deposit to depths of up to 500m below surface and along strike to better understand the potential for establishing another long life, high grade mine at the site.
While Mpama South could provide an opportunity to increase the production rate and life of operations at Alphamin, an extension of the life of mine at Mpama North (current producing orebody) can be confirmed by drilling down-dip and along strike beyond the northernmost holes drilled in the 2014 drilling campaign. A 6,000m diamond drilling campaign is planned for execution in Q2 2021 from an underground drilling drive (under development) located on Level 6 at Mpama North. Access for the drill rig to commence drilling is planned for April 2021.
Further, the 14km long strike length, hosting both Mpama North and South, has a plethora of anomalous geochemical targets for follow up and lies entirely within Alphamin’s tenements. In this regard, the company has commenced an extensive soil sampling campaign and is allocating expert resources to identifying additional drill targets for H2 2021.
Further Reading:
Alphamin tin mine leads from the front
Not the beginning or the end
The mere fact that Alphamin has brought its mine into production from scratch, is enough reason to invest in the mine’s future. It is a feat that not many other junior exploration mining companies will be able to emulate, not even in easy mining jurisdictions. Building a mine in the DRC is not for the faint hearted, and if ever there was a story to go viral on social media, maybe this should be the one. It has all the ingredients: the old; the new; the fundamentals; the management team; the risk; the geology, the ESG and the blue-sky potential.
Alphamin (TSX:AFM) is not the beginning or the end of tin’s unfolding, and up to now, untold story in Africa. Several new tin operations across Africa, in various stages of development, are drawing attention and should form part of the investor conversation. Tin’s value is only being realised now and with demand and the tin price on a relentless march to the north, and with new technology being one of the pillars of a greener and smarter future, there is no doubt that tin will feature more prominently in asset portfolios of the future.
When we look back twenty years from now, mines like Alphamin’s tin operations should be remembered as one of those ventures that created genuine value in the year of transformation, rather than one that drummed up support on social media to influence sentiment and made empty promises in an attempt to speed up transformation.
Alphamin is on the cusp of becoming one of the top tin mines in the world. Even now, without Mpama South being mined, it has the ability to dominate the reasonably small global tin market outside of China and Indonesia. If Mpama South delivers the expected goods, it will set the new world (and the old) alight, and it is bound to dominate future conversations about the greatest ever deposits in Africa.
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