REG - Andrada Mining Ltd - Q2 Ops Update for the period ended 31 August 2023

Andrada MiningAnnouncement

14/09/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230914:nRSN3805Ma&default-theme=true

RNS Number : 3805M  Andrada Mining Limited  14 September 2023

 

 

14 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")

Q2 Operational Update for the period ended 31 August 2023

Completion of the bulk sampling (lithium) pilot plant and tantalum circuit
commissioning.

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 second quarter ending
31 August 2023 ("Q2 2024").

HIGHLIGHTS
OPERATIONS

§ 86% year-on-year ("YoY") increase in tin concentrate to 398 tonnes (Q2
2023: 214 tonnes).

§ 79% YoY increase in contained tin metal to 238 tonnes (Q2 2023: 133
tonnes).

§ Completion of the tantalum circuit ("Circuit") commissioning with 225kg
produced.

§ Improved safety performance to 0.86 LTIFR at the end of the quarter
compared to 0.95 at the end of Q1 2024 and 8.02 at the end of Q2 2023.

LITHIUM DEVELOPMENT

§ Commissioning of the lithium pilot plant ("Pilot Plant") completed.

§ Initial test campaigns have commenced to produce a consistent saleable
grade of lithium concentrate.

EXPLORATION PROGRAMME

§ Spodumene Hill inaugural drill results over the B1 and C1 pegmatites
intersected high grade spodumene mineralisation with up to 2.32% Li₂O.

o All drill holes intercepted lithium rich pegmatites.

o High grade tantalum mineralisation was also recorded highlighting upside
potential.

§ Lithium Ridge Reverse Circulation ("RC") drilling programme provided
initial batch of results with notable lithium intersections with up to 2.13%
Li₂O.

o Second batch of results are expected shortly.

§ Lithium Ridge infill channel sampling confirmed the existence of continuous
mineralisation at surface over a 6 km strike length.

o When combined, the weighted average of the 27 highest lithium grade channel
sample lines amounted to 179 m at 1.20% Li₂O.

o The primary lithium minerals identified were spodumene and petalite.

FINANCIAL

§ Average C1¹ operating cash costs for Q2 2024 and H1 2024 are within
management guidance for the year, of between USD17 000 and USD20 000 per tonne
of contained tin, at USD19 560 and USD18 161 respectively.

§ Average C2² operating costs for Q2 2024 and H1 2024 are within management
guidance for the year of between USD20 000 and USD25 000 per tonne of
contained tin, at USD22 252 and USD20 796 respectively.

§ All-in sustaining cost ("AISC") ³ for Q2 2024 within and H1 2024 below
management guidance for the year of between USD25 000 and USD30 000 per tonne
of contained tin, at USD26 671 and USD24 662 respectively. The stripping
ratios have begun to decrease as the new ore is reached through the push-back.

§ Approximately USD10 million (GBP7.7 million) raised through issuance of
unsecured convertible loan notes. Proceeds mainly targeted at the expansion of
the tin, tantalum, and lithium exploration and production circuits. (see
announcement dated 18 July 2023).

§ USD25 million financing with Orion Resource Partners ("Orion") was updated
and will potentially be completed in the quarter ending November 2023. (See
announcement dated 15 August 2023).

§ Conclusion of NAD100 million (cUSD5.8 million) Development Bank of Namibia
("DBN") financing occurred after the period end, on 5 September 2023.

o Initial drawdown of the facility on 12 September 2023.

§ Cash balance on 31 August 2023 was USD7 million (GBP6 million).

CORPORATE

§ Strategic partner process discussions ongoing with parties that have met
the strategic criteria.

Anthony Viljoen, Chief Executive Officer, commented:

"Our main activity over the quarter involved the completion of commissioning
of the lithium pilot plant. The completion of commissioning is key to
expediting the metallurgical testwork that is essential to incorporating the
lithium circuit into the Run of Mine production. The main objective of the
testwork programme is to determine the optimal processing facility for
extracting consistent, homogenous, saleable concentrate for both the chemical
and industrial lithium markets.

The operational team has been performing extremely well on the existing plant
annually. Therefore, the potential additional lithium revenue credits from the
integration of the lithium plant to the main production circuit, could
substantially enhance total revenue. The conclusion of several work streams as
well as the completion of key financing partnerships this quarter, has notably
strengthened the Company's balance sheet for a transformational period of
growth and development."

 

OPERATIONAL SUMMARY
Table 1: Unaudited Uis Mine quarterly production and cost performance
 Description                    Unit                 Q1 FY 2024  Q2 FY 2023  Q2 FY 2024  H1 FY 2024  H1 FY 2023  YoY % Δ     YoY % Δ   QoQ % Δ

                                                                                                                 Quarterly   Interim
 Feed grade                     % Sn                 0.151       0.145       0.161       0.156       0.147       11%         6%        7%
 Plant processing rate          tph                  135         100         138         136         99          39%         0%        3%
 Ore processed                  t                    214 467     134 315     232 154     446 621     286 558     73%         56%       8%
 Tin concentrate                t                    359         214         398         758         455         86%         67%       11%
 Contained tin                  t                    216         133         238         454         287         79%         58%       10%
 Tin recovery                   %                    67          69          64          65          68          -7%         -2%       -5%
 Plant availability             %                    91          89          92          92          89          3%          3%        1%
 Plant utilisation              %                    79          69          83          81          74          20%         10%       5%
 Uis mine C1 operating cost(1)  USD/t contained tin  15 741      22 903      19 560      18 161      20 094      -16%        -10%      24%
 Uis mine C2 operating cost(2)  USD/t contained tin  18 235      25 245      22 252      20 796      22 668      -12%        -8%       14%
 Uis mine AISC³                 USD/t contained tin  21 377      29 282      26 671      24 662      25 812      -9%         -5%       25%
 Tin price achieved             USD/t contained tin  25 149      22 975      25 183      25 912      25 525      10%         2%        0%

¹C1 refers to operating cash costs per unit of production excluding selling
expenses and sustaining capital expenditure associated with Uis Mine.

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

³All-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.

Safety performance

There was a single LTI incident during the quarter. However, the operation's
safety record continued to improve over the quarter from a LTIFR of 0.95 at
the end of Q1 FY 2024 to 0.86 at the end of the quarter under review. The
continued improvement in safety is the result of the implementation of safety
culture programmes supported by independent external safety audits.

Increased volumes

Tin concentrate production increased by 86% to 398 tonnes resulting in a 79%
increase in contained tin to 238 tonnes YoY. The plant processing rate
increased by 39% YoY and 3% QoQ to 138 tph due to the positive impact of the
modular expansion implemented in Q3 FY 2023. All costs in the quarter
decreased YoY due to the economies of scale from higher volumes and improved
efficiencies. Despite the QoQ increases, the cash costs and AISC were mostly
within the management guidance except for the H1 2024 AISC figures that were
below guidance.

As previously disclosed, the Company decided to expedite the waste stripping
of the mining pit, which resulted in an accelerated pushback to access ore and
inadvertently a spike in the quarter stripping ratio to 4.9 (Q1 2024: 2.3).
Stripping ratios have begun to decrease as the ore is reached, and management
expects the ratio for H2 FY 2024 to be 3.9 resulting in an annual ratio of
3.8. The lower recovery rates in the quarter were mainly due to the increased
throughput and significantly finer ore processed. The costs of this however,
remain within previous management guidance.

LITHIUM, TANTALUM development & METALLURGY UPDATE
Completion of the Lithium Pilot Plant commissioning

Andrada completed the commissioning of the Pilot Plant with the testing of
samples to determine the optimal process for lithium extraction from all three
mining licences commencing in October 2023. The feed from Uis will constitute
both run of mine ("ROM") material and the discard from the tin processing
plant, whilst that from Lithium Ridge and Spodumene Hill will be ROM material.

The Pilot Plant is also targeted to produce a minimum of 2 400 tpa of
saleable concentrate for glass-ceramics off-takers. To date, the Company has
sent high purity petalite concentrate produced off-site to several potential
customers and discussions to conclude an initial sale of lithium product are
advanced. The Company believes that the concentrate is also potentially
suitable as feedstock for lithium refineries producing lithium carbonate or
lithium hydroxide for the battery manufacturing industry.

Completion of the Tantalum Circuit commissioning.

Similarly, the commissioning of the Tantalum Circuit was successfully
completed, and it is currently being optimised. During commissioning,
approximately 225 Kg of tantalum was produced. Tantalum concentrate is used to
produce a range of tantalum chemicals or refined into metal for use in niche
metal products or alloys. Tantalum is essential for high-performance
applications such as capacitors, superalloys, and electronics for aerospace,
military, and consumer use. Current tantalum prices for 25% Ta₂O₅ are as
high as USD170 000 per tonne⃰.

EXPLORATION PROGRESS UPDATE
Mining licence 129: Spodumene Hill

An initial drill programme of 17 holes over the B1 and C1 pegmatite bodies was
completed during the quarter All the drill holes returned positive results
with spodumene being identified in all holes drilled (see announcement dated 6
July for full details of these results). The programme returned weighted
average grades of up to 1.38% Li₂O and 285 ppm tantalum. The results of this
programme highlight the mineral potential of Spodumene Hill. The Company has
initiated a metallurgical programme to investigate the optimal beneficiation
process for the recovery of both lithium and tantalum, whilst also producing
tin as a by-product.

 

⃰Argus Non-Ferrous Markets, Issue 23 - 174.Monday 11 September 2023

Mining licence 133: Lithium Ridge
Lithium Ridge infill channel sampling results confirmed the existence of continuous mineralisation at surface over a 6 km strike length. The primary lithium minerals identified were spodumene and petalite and the weighted average of the 27 highest lithium grade channel sample lines amounted to 179 m at 1.20% Li₂O. (See announcement dated 29 August 2023).
Post-period, initial results for 14 out of 24 holes from the Lithium Ridge RC drilling programme reported notable lithium intersections with up to 2.13% Li₂O. (See announcement dated 6 September 2023).
Off-site testing update

Metallurgical test work to date has focused on the concentration of petalite
due to its prevalence in all the mining areas. Lithium recovery has therefore
been focussed on petalite recovery, whilst the feasibility of concentrating
other lithium bearing minerals from the deposit is also being investigated.
Testing for spodumene is planned to commence in Q4 FY2024. Three technologies
are being explored to determine the optimal solution to extract petalite. Test
work has indicated that it may be possible to upgrade ore to a saleable
concentrate solely through DMS technology. Transfer of off-site DMS and XRT
testing to the Pilot Plant is currently on-going.

FINANCE
Orion Resource Partners USD25 million financing

In August 2023, Andrada signed binding documentation for an updated,
conditional USD25 million funding package with Orion. The financing is
conditional on the satisfaction of requirements customary with transactions of
this nature and shareholder approval of certain resolutions at the Company's
Annual General Meeting which is to be held on 29 September 2023. (see
announcement dated 15 August 2023). Funding is expected to be completed around
the end of September 2023.

Development Bank of Namibia ("DBN") funding

Post-period end on 5 September 2023, DBN confirmed that all conditions had
been fulfilled or waived for the finalisation of a N$100 million (USD5.8
million) financing. The proceeds are ring-fenced for implementation of the Uis
Mine Stage II Continuous Improvement Project. (See announcement dated 5
September 2023). The Company has drawn N$50 million from this facility to
date.

Cash balance

The combined cash and cash equivalent balance on 31 August 2023 was USD7
million (GBP6 million). During the quarter the available funds were mainly
utilised for the commissioning of the Lithium Pilot Plant and the Tantalum
Circuit.

CORPORATE
Strategic process update
The strategic process to identify an appropriate partner to participate in the lithium development is progressing well. Discussions are ongoing with parties that have met the strategic criteria and they are expected to continue beyond 30 September 2023. Meanwhile, the Company is focused on completing the workstreams required to finalise the process. Further updates on the strategic process will be communicated in due course as appropriate.
Glossary of abbreviations
 FY     Financial year for the period March to April
 GBP    British pound sterling
 LTI    Lost time injury
 LTIFR  Lost time injury frequency rate
 ppm    Parts per million
 Sn     Symbol for tin
 t      Tonnes
 tph/a  Tonnes per hour/annum
 USD    United States Dollar

 

   Contact
 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 that has been
implemented at all levels of the Company and aligns with international
standards.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDGZGMLMFNGFZZ