Alphamin Resources, which is developing the Bisie tin mine in the northeastern Democratic Republic of Congo, had applied for a secondary listing on the JSE’s AltX sector as part of its equity fundraising for the project, it said on Tuesday.
BMI Research, part of Fitch Group, forecasts a rise in global tin prices to $22,500/tonne by 2021 from about $19,500/tonne in 2017 as growth in tin demand, driven largely by the electronics sector, will outstrip production. China’s share of global consumption is expected to rise to 59% by 2021 from 55% at present, while India and Germany are also growing strongly.
Alphamin, whose primary listing is on the Toronto Venture Exchange, has already spent $75m on exploration, infrastructure and the underground portal and decline shaft at Bisie. The mine will have a peak funding requirement of $172.1m, including $23m as a contingency.
To date, Alphamin has raised $140.7m, or 80% of the peak funding requirement, including through a previous equity issue, $13.7m from the Industrial Development Corporation and $24.7m committed by Alphamin’s 44% shareholder, Tremont Master Holdings.
This week, Alphamin signed a $80m credit facility with a consortium including Sprott Private Resource Lending, Barak Fund and Tremont.
CEO Boris Kamstra said it was unlikely that the full $31.4m still to be raised in equity would come entirely from the placement of shares ahead of the listing on the JSE.
Brokers have indicated there would be interest from South African investors for at least $10m. The remainder will probably be raised in Toronto and from a trader.
Alphamin’s share price is at C$0.40 ($0.31), having added 14% on news of the fundraising.
Bisie will deliver its first tin in 2019 and reach steady-state production at the end of that year. Progress has already been made on building the underground portal and decline as well as the road and airstrip.
The first phase of the mine will develop the resource at Mpama North to produce about 10,000 tonnes of tin a year for 12-and-a-half years. The cash cost per tonne of tin sold will be about $10,359.
At a tin price of about $21,400/tonne it will deliver earnings before interest, tax, depreciation and amortisation of about $110m a year.
The payback period from first production is 17 months.
There was potential upside in the future from digging deeper at Mpama North and exploiting a nearby resource at Mpama South, where initial drilling had been positive, Kamstra said.
Alphamin has signed a memorandum of understanding with the local Walikale community under which it has committed to spend 4% of its in-country expenses on community development.