REG - Andrada Mining Ltd - Development Bank of Namibia financing concluded

Andrada MiningAnnouncement

05/09/2023 07:00

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RNS Number : 4023L  Andrada Mining Limited  05 September 2023

5 September 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"

and with its subsidiaries, the "Group")

Conclusion of the Development Bank of Namibia financing.

Financing to improve tin recovery up to 69%.

Further to the announcement of 15 August 2023, Andrada Mining Limited (AIM:
ATM, OTCQB: ATMTF), an African technology metals mining company with a
portfolio of mining and exploration assets in Namibia, is pleased to confirm
that the Development Bank of Namibia ("DBN") has served notice confirming that
all conditions have been fulfilled or waived and that financial close has
occurred. Accordingly, the Group is in the process of requesting the drawdown
of the NAD100 million (cUS$5.8m) facility ("the Funds") which are expected to
arrive this week. These Funds will be used to expedite the implementation of
the Uis Mine Stage II Continuous Improvement Project ("CI2").

HIGHLIGHTS

§ Funding is ring-fenced for the implementation of the Uis Mine CI2.

§ As set out in the announcement of 5 June 2023, the terms are:

-     Term of 10 years ranked as senior secured debt pari passu to the
Standard Bank Namibia loan.

-     No interest or capital repayments for the initial 12 months after
execution.

-     Interest will accrue at Namibian prime lending rate (currently
11.5%) plus 2.5% per annum.

Anthony Viljoen, Chief Executive Officer, commented:

"The conclusion of the DBN funding is an essential component of the overall
funding and development strategy. These proceeds will be used to implement the
improvements at Uis Mine which will enhance the plant's productivity and
output. The targeted increase in the tin recovery rate should complement the
royalty portion of the Orion funding by enabling Andrada to achieve the
requisite thresholds of concentrate tonnages. The improvement in cost
efficiencies and overall productivity at Uis, lays the foundation for the
management of the lithium processing plant and other future operations.

The funding sourced since the successful US$22.8 million equity raise in
September 2022, has significantly strengthened Andrada's balance sheet and
provides us with optionality on how to   expedite our multi-tech development
strategy. Importantly, the DBN and Orion funding (see announcement 15 August
2023) will enable us to implement various strategic initiatives necessary for
further production growth and the stabilisation of the Company's assets.
Partnering with the DBN and gaining the bank's confidence, will enable the
Company to secure additional infrastructure development financing potentially
required for our future growth aspirations.

As we continue with the Barclays-led strategic process to identify an
appropriate partner for our lithium development strategy, we are
simultaneously expanding our resource through an extensive exploration
programme and determining the optimal way to become a multi-tech-metals
producer through the metallurgy programme."

DBN FINANCING TERM sheet

As announced on 5 July 2023 and 5 July 2022, the loan has a term of 10 years
and is ranked as senior secured debt pari passu to the Standard Bank Namibia
loan. There are no interest or capital repayments for the initial 12 months
after execution and interest will accrue at the Namibian prime lending rate
(currently 11.5%) plus 2.5% per annum.

The funding is ring-fenced for the Uis Mine CI2 to complement the expansion
project completed in October 2022.

Uis mine continuous improvement

The modular expansion of the crushing and tin concentration circuits during
the third quarter of FY 2023, resulted in approximately 70% increased
capacity. The primary objective of the expansion was to increase production
tonnage to reduce costs through economies of scale. The enhanced plant
performance has revealed bottlenecks that need to be eliminated to ensure that
the increased output and higher production rates are sustainable. To that
effect, the CI2 is expected to improve processing efficiencies to maximise the
tin concentrate recovery rate, establish business sustainability through the
enhancement of operational support infrastructure and reduce operating costs.
Ultimately, the CI2 is targeted to increase the plant throughput to greater
than 1Mtpa.

Process improvement efficiency

The objective is to maximise the tin recovery rate up to c69% by improving the
visibility of plant operating parameters to operational staff, and by
enhancing metal accounting through an increased rate of metallurgical
sampling. Furthermore, improvements on the slurry pumps and lines will be
implemented by installing appropriately sized equipment with wear resistant
parts and the best material type for piping throughout the plant. A third
shaking table set will be installed for increased concentrate production and a
new belt scale, as well as flow meters will be installed to further improve
metal accounting. Finally, the plant laboratory function will be expanded.

Enhancements of the business sustainability support infrastructure

These enhancements will ensure a safe working environment to eliminate the
risk of long duration operational disruptions. Major enhancements in terms of
support infrastructure will entail the expansion of the main and plant
substations to ensure reliable electricity supply in line with the higher
production rates. Additional process water supply will be developed to cater
for the increased production in the wet plant. An improved stormwater
management plan will be implemented including the installation of berm
channels, construction of a return water dam and settling pond. For enhanced
safety, firefighting protocols will be improved, fences installed, and roads
constructed within the whole operational area.

Reduction of operational costs

The key cost reduction initiative is designed to implement efficient supply
chain management. Sufficient inventory of critical spares will reduce costs by
eliminating emergency procurement. The target is to reduce operational costs
by up to 10%.

Conclusion

The planned improvements will be implemented over the next 6 months with the
initial results of the CI2 expected from Q1 FY 2024.

Lithium Ridge exploration drilling results update

The Company anticipates releasing the assay results from the ML133 lithium
exploration drill programme, for the initial 14 drill holes, within the next
few days.

 

 Andrada Mining Limited                   +27 (11) 268 6555

 Anthony Viljoen, CEO                     investorrelations@andradamining.com

 Sakhile Ndlovu, Investor Relations

 Nominated Adviser
 WH Ireland Limited                       +44 (0) 207 220 1666

 Katy Mitchell

 Corporate Adviser and Joint Broker
 H&P Advisory Limited                     +44 (0) 20 7907 8500

 Andrew Chubb

 Jay Ashfield

 Matt Hasson

 Stifel Nicolaus Europe Limited           +44 (0) 20 7710 7600

 Ashton Clanfield

 Calum Stewart

 Varun Talwar

 Tavistock Financial PR (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, all of which 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
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 which has been
implemented at all levels of the Company and aligns with international
standards.  END 

 

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