AfriTin first fruits top N$1 million
By Hilary Mare
IN spite of difficult times in global markets, Aim-listed mining company AfriTin managed to produce its first tin concentrate and generate its first revenue of N$1 034 000 from its flagship Uis tin mine, during the financial year ended February 29 2020.
AfriTin recently completed the Uis phase one pilot plant, consisting of a four-stage crusher and a three-stage dense media separation (DMS) and dewatering circuit.
In addition to tin production, CEO Anthony Viljoen last week said that the phase one pilot plant was a “crucial step” in proving the metallurgical process in the lead-up to the phase two project.
“While our focus remains on ramping up the pilot plant to its design capacity of 500 000 tonnes of ore feed [a year], it is the lessons learned from phase one that will be invaluable when we progress to phase two,” he commented.
AfriTin also received a strong vote of confidence in the long-term development plan of the mine when it concluded an off-take agreement with Thaisarco, a fellow tin concentrate market player.
As part of the contract signed on August 1 2019, concentrate produced during the off-take period is to be shipped to Thaisarco, in Thailand, from the port of Walvis Bay. Thaisarco will pay AfriTin on the basis of actual tin content in the concentrate.
Viljoen said the agreement provides the company with a steady revenue stream.
With Uis becoming a fully-fledged operation during the year, AfriTin Chief Financial Officer Robert Sewell said administrative expenses across the group increased to N$40 million for the year.
He explained that the increase from the prior year’s N$22 million, was as a result of the group incurring a full year of office rental costs, an increase in salary costs owing to an increase in head count, given the ramp-up of operations, as well as the one-off issue of shares to new key members of the management team and due diligence costs relating to potential future financing options.
Additionally, the start of a preliminary economic assessment for Phase 2 and other exploration and evaluation work resulted in expenditure of N$11.4 million being capitalised to the exploration and evaluation intangible asset.
During the year, Sewell noted that a working capital facility of N$38million was granted to the company by Nedbank Namibia.
As of February 28, N$24.7 million had been drawn down on this facility, which has successfully been renewed and increased subsequent to year-end and is due for its yearly review and renewal next July.
Subsequent to the financial year end, the completion of a convertible loan note for just over N$44 million on May 5 2020, an equity subscription of N$66 million on August 3, as well as the renewal and increase in the Nedbank Namibia working capital facility, will allow AfriTin to continue the ramp-up of the Uis project, said Sewell.
The convertible loan note matures in May 2021 and can be settled in cash or equity subject to the agreement of both parties.
Based on the recent funding, AfriTin has strengthened its financial position and forecasts indicate that the group will have sufficient working capital for at least the next 12 months.