REG - Andrada Mining Ltd - Q3 Ops Update for the period ended 30 Nov 2023

Andrada MiningAnnouncement

22/12/2023 07:00

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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 C1¹ operating cash cost at USD 18 917 was within management
guidance of between USD17 000 and USD20 000 per tonne of contained tin.

§ Average C2² 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% Li₂O (75% spodumene), produced from laboratory-scale flotation tests of two Lithium Ridge exploration samples.
-     The flotation test achieved a Li₂O 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 2024  Q2 FY 2024  Q3 FY 2024  Q3 FY 2023¹   YoY % Δ   QoQ % Δ

 Feed grade                    % Sn                 0,144       0,152       0,134       0,140         1%        -12%
 Plant processing rate         tph                  135         138         138         107           29%       0%
 Ore processed                 t                    214 467     232 154     228 234     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 operating cost²   USD/t contained tin  15 741      19 560      18 917      30 907        -39%      -3%
 Uis mine C2 operating cost³   USD/t contained tin  18 235      22 252      21 386      33 207        -36%      -4%
 Uis mine AISC⁴                USD/t contained tin  21 377      26 671      30 452      38 570        -21%      14%
 Tin price achieved            USD/t contained 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.

³C2 operating cash cost is the C1 amount including selling expenses
(logistics, smelting and royalties).

⁴All-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% Li₂O. (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% Li₂O and 15.2% spodumene, a weighted
average concentrate grade of 6.8% Li₂O or 75% spodumene and a weighted
average recovery 76% Li₂O 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                   +44 (0) 207 220 1666

 Katy Mitchell

 CORPORATE BROKER & ADVISOR
 H&P Advisory Limited                 +44 (0) 20 7907 8500

 Andrew Chubb

 Jay Ashfield

 Matt Hasson

 Berenberg                            +44 (0) 20 3753 3040

 Jennifer Lee

 WHI Capital Markets                  +44 (0) 20 7220 1670

 Harry Ansell

 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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