TIDMATM
RNS Number : 6970X
Andrada Mining Limited
22 December 2023
22 December 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information will be in the
public domain.
Andrada Mining Limited
("Andrada" or the "Company")
Q3 Operational update for the period ended 30 November 2023
Production of saleable lithium concentrate from the pilot
plant
Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African
technology metals mining company with a portfolio of mining and
exploration assets in Namibia hereby provides an unaudited
operational update for the third quarter ended 30 November 2023 for
the financial year 2024 ("Q3 FY2024").
HIGHLIGHTS
Operations
-- Over 100% year-on-year ("YoY") increase in tin concentrate to
346 tonnes (Q3 FY2023: 145 tonnes).
-- Over 100% YoY increase in contained tin metal to 202 tonnes
(Q3 FY2023: 87 tonnes).
-- Plant utilisation increased to 86% (Q3 FY2023: 63%).
-- Production of 10 tonnes on-specification saleable lithium
concentrate.
-- Lithium pilot plant ("Pilot Plant") production ramp up to 250
tonnes per month planned for Q1 CY2024.
Exploration
-- Reverse Circulation ("RC") drilling programme completed on
the Lithium Ridge licence area.
- All holes intersected pegmatites with significant lithium
mineralisation along a 6km strike length.
- Spodumene and petalite identified as the primary minerals.
-- Commencement of an exploration programme on Brandberg West
licence area.
- Historically a producer of tin and tungsten with strong indications of copper mineralisation.
-- Plans completed for lithium exploration drilling campaigns on
all mining licence areas in CY2024.
Metallurgy
-- On-going metallurgical testwork for production of battery
grade lithium hydroxide.
-- Preliminary metallurgical investigations on Spodumene Hill
and Lithium Ridge material.
-- Metallurgical testwork to optimise production at Uis
progressing well.
Sustainability
-- Completion and publication of the 2023 Sustainability Report
for the 12 months ended February 2023, highlighting Andrada's
contribution of GBP33 million to the Namibian economy since
inception.
-- Lost Time Injury Frequency Rate ("LTIFR") at 2.45 (Q3 FY2023:
5.47) at the end of the quarter compared to 0.86 at the end of Q2
FY2024.
-- Increased social engagement during the quarter to align with
the objective of contributing to resilient communities.
Financial
-- Average C1(1) operating cash cost at USD 18 917 was within
management guidance of between USD17 000 and USD20 000 per tonne of
contained tin.
-- Average C2(2) operating cost at USD 21 386 was within
management guidance for the year of between USD20 000 and USD25 000
per tonne of contained tin.
-- All-in sustaining cost ("AISC") (3) at USD 30 452 was
slightly above management guidance of between USD25 000 and USD30
000 per tonne of contained tin.
-- Receipt of USD 25million from Orion Mining Finance funding,
including a USD12.5 million tin royalty. (See announcement of 16
November for more details of this arrangement).
-- Conclusion of the Development Bank of Namibia NAD 100 million
funding and receipt of 50% of the funds for the Continuous
Improvement 2 ("CI2") project at Uis Tin Mine. (See announcement
dated 5 September 2023).
-- Unaudited cash balance on 30 November 2023 of GBP21 million
(USD26 million).
Post-period
Production of spodumene concentrate
-- High-grade spodumene concentrate, at a grade of 6.8% Li O
(75% spodumene), produced from laboratory-scale flotation tests of
two Lithium Ridge exploration samples.
- The flotation test achieved a Li O recovery of 76% or, specifically, 80% spodumene recovery.
Appointment of joint corporate brokers
-- Appointment of Joh. Berenberg, Gossler & Co. KG
("Berenberg") and WH Ireland Limited ("WHI") as joint corporate
brokers to access a wider investor base and top-tier research
capability.
Anthony Viljoen, Chief Executive Officer, commented:
"We made significant strides in Q3 towards becoming a
multi-technology producer. Drilling confirmed notable lithium
intersections at Lithium Ridge, and post-period metallurgical
production of spodumene concentrate marked major milestones towards
entering downstream lithium markets. We also launched an
exploration programme at Brandberg West, with the potential to
expand our portfolio to include tungsten and copper.
"Operational performance improved against the same quarter in
FY2023 due to the lower comparative base. We aim to further enhance
cost efficiencies by increasing tin production through the CI2
project. The tin royalty will provide the necessary funding to
produce up to 2,000 tonnes of contained tin per annum, positioning
Andrada as a major global supplier.
"To further strengthen our investor outreach, we have appointed
Berenberg and WHI as joint corporate brokers. Together with our
current corporate brokers, Hannam & Partners, these
appointments give us extensive reach into the UK and European
capital markets."
OPERATIONAL review
Table 1: Unaudited Uis Mine quarterly production and cost
performance
Description Unit Q1 FY Q2 FY Q3 FY Q3 FY YoY QoQ
2024 2024 2024 2023(1) % <DELTA> % <DELTA>
Feed grade % Sn 0,144 0,152 0,134 0,140 1% -12%
---------------- ------- ------- ------ -------- ---------- ----------
Plant processing
rate tph 135 138 138 107 29% 0%
---------------- ------- ------- ------ -------- ---------- ----------
228
Ore processed t 214 467 232 154 234 90 278 153% -2%
---------------- ------- ------- ------ -------- ---------- ----------
Tin concentrate t 359 398 346 145 139% -13%
---------------- ------- ------- ------ -------- ---------- ----------
Contained tin t 216 238 202 87 132% -15%
---------------- ------- ------- ------ -------- ---------- ----------
Tin recovery* % 70 67 66 68 -3% -4%
---------------- ------- ------- ------ -------- ---------- ----------
Plant availability % 91 92 89 73 22% -3%
---------------- ------- ------- ------ -------- ---------- ----------
Plant utilisation % 79 83 86 63 37% 4%
---------------- ------- ------- ------ -------- ---------- ----------
Uis mine C1 USD/t contained
operating cost(2) tin 15 741 19 560 18 917 30 907 -39% -3%
---------------- ------- ------- ------ -------- ---------- ----------
Uis mine C2 USD/t contained
operating cost(3) tin 18 235 22 252 21 386 33 207 -36% -4%
---------------- ------- ------- ------ -------- ---------- ----------
USD/t contained
Uis mine AISC tin 21 377 26 671 30 452 38 570 -21% 14%
---------------- ------- ------- ------ -------- ---------- ----------
USD/t contained
Tin price achieved tin 25 149 25 183 24 749 22 625 9% -2%
---------------- ------- ------- ------ -------- ---------- ----------
(1) Production period includes a five - week shutdown of the
processing plant from 7 September 2022 - 13 October 2022 which was
required to complete the construction and commissioning of the
expanded crushing and tin concentrating circuits.
(2) C1 refers to operating cash cost per unit of production
excluding selling expenses and sustaining capital expenditure
associated with
Uis Mine.
(3) C2 operating cash cost is the C1 amount including selling
expenses (logistics, smelting and royalties).
All-in sustaining cost (AISC) incorporates all costs related to
sustaining production, capital expenditure associated with
developing
and maintaining the Uis operation as well as pre-stripping waste
mining costs.
*Tin recovery includes stockpiles
Tin concentrate production increased by 139% to 346 tonnes (Q3
FY2023: 145 tonnes) resulting in a 132% increase in contained tin
to 202 tonnes YoY. The plant processing rate increased by 29% YoY
reflecting the improvement in productivity resulting from the
modular plant expansion in Q3 FY2023. It is important to highlight
that the significant variances YoY are due to the low production
volumes in Q3 FY2023 arising from the planned plant outages to
implement the expansion project.
Lithium and tantalum development
Lithium Pilot Plant
Approximately 10 tonnes of saleable concentrate were produced in
October 2023. The production rate is expected to increase to 250
tonnes per month by the end of March 2024. By the end of February
2024, the Company aims to produce concentrate for initial
commercial sales into the spot market, a goal which the Directors
believe is a realistic prospect. Initial internal estimates suggest
that the petalite concentrate from the Pilot Plant could be priced
between USD1 600 and USD2 200 per tonne in the current spot market
(pricing provided for guidance purposes only). Importantly, Andrada
has commenced production of petalite concentrate for metallurgical
testwork to determine appropriate specifications for the lithium
battery refinery market.
Tantalum Circuit
Optimisation of the circuit is ongoing to improve productivity.
The Company is on track to supply tantalum to AfriMet on a
quarterly basis, commencing March 2024.
EXPLORATION
Lithium Ridge drilling results
Lithium Ridge infill channel sampling programme confirmed the
presence of continuous mineralisation at surface over a 6 km strike
length of multiple mineralised pegmatites. The initial RC drilling
programme confirmed the continuation of mineralisation at depth
within several pegmatites. The primary lithium minerals identified
through drilling were spodumene and petalite with notable lithium
contents at grades exceeding 2% Li O. (See announcement dated 29
August 2023, 6 September 2023 & 18 September 2023).
Lithium CY 2024 exploration strategy
The exploration programme plan for CY2024 was completed during
the quarter, with the aim of enhancing the understanding of
mineralisation on all the Company's mining licences. (See
announcement dated 27 November 2023).
These plans include:
-- Uis (ML134): Resource validation drilling over the Northern
and Central pegmatite clusters to enhance the current Mineral
Resource Estimate ("MRE") classification of tin, as well as to
establish the mineral potential for lithium and other technology
metals.
-- Lithium Ridge (ML133): High-density drilling campaign at the
historical TinTan mine for the development of a maiden MRE, and to
enhance understanding of the lithium mineralisation within the
identified high priority pegmatites.
-- Spodumene Hill (ML129): Drilling programme to delineate the
higher grade spodumene zones within the B1 and C1 pegmatites, as
well as on the mapped satellite bodies surrounding the main
mineralised units.
Brandberg West (EPL 5445)
Brandberg West has multiple documented mineral occurrences
including known concentrations of tin and tungsten. The potential
production of tungsten will expand the number of technology metals
within the Company's portfolio. Copper mineralisation has also been
documented within the mineralised area and will be investigated as
a potential by-product. A dual phased development plan to
investigate multiple occurrences of mineralisation through sampling
and geological mapping will be undertaken to determine potential
enrichment trends. (See announcement dated 12 November 2023).
Metallurgy
Lithium production focus
The primary lithium minerals at Andrada's three mining licences
are petalite and spodumene, although their distribution varies
across the licence areas. The explored pegmatites on Uis are
petalite-dominant but are spodumene-dominant on Lithium Ridge and
Spodumene Hill. Andrada's lithium development strategy will
incorporate the production of both petalite and spodumene
concentrates, enabling multiple off-take options for both the
industrial (glass-ceramics) and chemical (battery) concentrate
markets. The Company is implementing metallurgical testwork to
assess the possibility of producing battery grade lithium hydroxide
as well as to optimise production from Uis, Spodumene Hill and
Lithium Ridge.
Sustainability
Andrada's progress against its five-year sustainability
strategy, remains on track. During the quarter under review, the
Company increased its social engagement in line with a pledge to
fortify local communities. The Company continued implementing
safety campaigns to further instil and improve safety
performance.
There were no fatalities, but two lost time injury incidents
occurred during the quarter resulting in an increased LTIR of 2.45
at the end of the quarter under review, compared to 0.86 at the end
of Q2 FY2024. However, the performance was an improvement on the
5.47 rate at the end of Q3 FY2023. These incidents were thoroughly
investigated to ensure sufficient mitigation measures. Quarterly
independent audits continue to be conducted to address any
identified safety gaps.
The Company completed its Biodiversity Assessment and Climate
Change Scenario Analysis to provide vital insights for biodiversity
preservation and climate-related resilience planning. Concurrently,
the Andrada sustainability team has been reviewing the Global
Industry Standard on tailings management to minimise environmental
impact and mitigate risks. These combined efforts place the Company
in a good position to address any future challenges with foresight
and responsibility.
FINANCial
All costs in the quarter decreased YoY due to the economies of
scale from higher volumes and improved efficiencies. Although the
C1 and C2 costs decreased quarter-on-quarter remaining within the
management guidance, the AISC was approximately 2% higher at USD30
452. The latter is expected to decrease to within management
guidance as production volumes increase.
Andrada received the USD 25million Orion funding including a
USD12.5 million tin royalty. Furthermore, the NAD 100 million
funding from DBN was finalised during the quarter, with receipt of
50% of the funds for the CI2 project at Uis Tin Mine. The Company
is targeting contained tin production of up to 2 000 tonnes to
achieve the tin royalty tonnage.
The combined cash and cash equivalent balance on 30 November
2023 was GBP21 million (USD26 million).
CORPORATE
The strategic process to identify an appropriate partner to
participate in the lithium development is progressing well. Further
updates on the strategic process will be communicated in due course
as appropriate.
POST-PERIOD
High-grade spodumene concentrate produced through flotation
Laboratory - scale flotation test work was undertaken on two
samples selected from exploration drill chips produced during
reverse circulation drilling. The aim of these tests was to
investigate lithium mineral composition and recovery potential in
an area of the Lithium Ridge licence where significant spodumene
occurrence had been observed during exploration. The samples
yielded a weighted average feed grade of 1.69% Li O and 15.2%
spodumene, a weighted average concentrate grade of 6.8% Li O or 75%
spodumene and a weighted average recovery 76% Li O or 80%
spodumene.
Appointment of Joh. Berenberg, Gossler & Co. KG and WH
Ireland Limited as corporate brokers
The Company has appointed Berenberg and WHI as joint corporate
brokers as of 19 December 2023. Berenberg's research expertise and
global investor reach will enhance awareness of Andrada's value
proposition, while WHI provides access to a new segment of
investors. Berenberg and WHI will work alongside Hannam and
Partners Advisory Limited, the Company's existing corporate broker,
positioning us for continued growth and success
Glossary of abbreviations
CY Calendar year for the 12 months ending December
FY Financial year for the 12 months ending March
------------------------------------------------
GBP British pound sterling
------------------------------------------------
LTIFR Lost time injury frequency rate
------------------------------------------------
NAD Namibian dollar
------------------------------------------------
Sn Symbol for tin
------------------------------------------------
t Tonnes
------------------------------------------------
USD United States Dollar
------------------------------------------------
Contact
ANDRADA MINING LIMITED
Anthony Viljoen, CEO +27 (11) 268 6555
Sakhile Ndlovu, Investor Relations investorrelations@andradamining.com
NOMINATED ADVISOR
WH Ireland Limited
Katy Mitchell +44 (0) 207 220 1666
CORPORATE BROKER & ADVISOR
H&P Advisory Limited
Andrew Chubb
Jay Ashfield
Matt Hasson +44 (0) 20 7907 8500
Berenberg
Jennifer Lee +44 (0) 20 3753 3040
WHI Capital Markets
Harry Ansell +44 (0) 20 7220 1670
FINANCIAL PUBLIC RELATIONS
Tavistock (United Kingdom) +44 (0) 207 920 3150
Jos Simson andrada@tavistock.co.uk
Catherine Drummond
Adam Baynes
About Andrada Mining Limited
Andrada Mining Limited, formerly Afritin Mining Limited, is a
London-listed technology metals mining company with a vision to
create a portfolio of globally significant, conflict-free,
production and exploration assets. The Company's flagship asset is
the Uis Mine in Namibia, formerly the world's largest hard-rock
open cast tin mine.
An exploration drilling programme is currently underway with the
aim of expanding the tin resource over the fourteen additional,
historically mined pegmatites that occur within a 5 km radius of
the current processing plant. The Company has set a mineral
resource target of 200 Mt to be delineated within the next 5 years.
The existing mine, together with its substantial mineral resource
potential, allows the Company to consider economies of scale.
Andrada is managed by a board of directors with extensive
industry knowledge and a management team with extensive commercial
and technical skills. Furthermore, the Company is committed to the
sustainable development of its operations and the growth of its
business. This is demonstrated by the manner in which the
leadership team places significant emphasis on creating value for
the wider community, investors, and other key stakeholders. Andrada
has established an environmental, social and governance system that
has been implemented at all levels of the Company and aligns with
international standards.
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