REG - Andrada Mining Ltd - Quarterly FY 2023 production and Company update

Andrada MiningAnnouncement

20/03/2023 07:00

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RNS Number : 4449T  Andrada Mining Limited  20 March 2023

 
 
 

20 March 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")

Quarterly, FY 2023 production and Company update

Lithium development on track and production capacity significantly increased.

Andrada Mining Limited (AIM: ATM), an African technology metals mining company
with a portfolio of mining and exploration assets in Namibia, provides an
unaudited production update for the Uis Mine ("Uis") for its fourth quarter
("Q4") and full financial year ended 28 February 2023 ("FY 2023").

Highlights

Lithium

·    Anticipated completion of the lithium bulk-testing pilot facility in
June 2023.

·   Metallurgical testwork done by Geolabs Global, an independent test
facility in South Africa has identified a process that could produce a lithium
concentrate suitable for buyers' specifications in industrial and battery
feedstock markets.

·   Drilling on the ML129 licence area (B1C1 pegmatites), to investigate
the visible spodumene mineralisation, commenced in January 2023.

·    Field mapping of drill targets on the ML133 licence area (Nai Nais
pegmatites) finalised.

·    Detailed exploration update scheduled for release in June 2023.

·    Andrada is exploring several options for achieving early lithium
revenues in the second half of the 2023 calendar year including concentrate
production from the bulk pilot plant.

Operations

·    Record quarterly production of 361 tonnes of tin concentrate in FY Q4
2023, containing 214 tonnes of tin metal.

·    19% increase in tin concentrate production year-on-year ("YoY") to
960 tonnes (FY 2022: 804 tonnes).

·    18% increase in contained tin to 586 tonnes (FY 2022: 496 tonnes).

·    Lowest ever quarterly all-in sustaining costs ("AISC") at USD 18,236
per tonne of contained tin in Q4 2023.

·    Full year AISC fell by 9% to USD 24,939 YoY.

·    Commencement of confirmatory drilling in February 2023 to upgrade
historic resources on proximal pegmatites.

Financing

·  Significant progress towards fulfilling the precedent conditions for the
Orion Resource Partners ("Orion") and the Development Bank of Namibia ("DBN")
financing.

·    Cash balance at the end of February 2023 increased by 16% to GBP 8.6
million (USD 10.3 million) from GBP 7.4 million (USD 9.9 million) on 28
February 2022.

Management restructuring

·   Appointment of Frans Van Daalen as Chief Strategy Officer ("CSO") to
drive business development strategy, with a focus on accelerating the lithium
project and Chris Smith as the Chief Operations Officer ("COO"), both
non-board positions.

Operational guidance for the 12 months ending 29 February 2024 ("FY 2024")

·   Tin concentrate production guidance of between 1,400 tonnes and 1,500
tonnes, an expected increase of between 45% to 56% YoY, due to the plant
expansion ramp-up.

·  Average operating cash costs excluding selling expenses defined as C1
operating cash costs are projected to be between USD17,000 and USD20,000.
These are costs within management's control that are expected to remain
relatively flat from levels in Q4 2023 (post expansion) and subject only to
exchange rate fluctuations.

·   Average operating cash cost per tonne produced including selling
expenses (shipping, freight, and royalties) projected to be  between
USD20,000 and USD25,000 and AISC  between USD25,000 and USD30,000.  These
costs are expected to rise mainly because of a temporary increase in stripping
rates for the V1/V2 pit and the inclusion of the 4.5% royalty costs associated
with the proposed Orion transaction. The pushback width in the pit has
increased from approximately 50 metres to 75 metres in line with the expanded
capacity and the provision of  safer and more efficient operations.

The guidance excludes potential lithium and tantalum revenues. Management will
provide guidance following the commissioning of the lithium pilot plant and
tantalum circuit expected in June 2023.

Anthony Viljoen, Chief Executive Officer, commented:

"The exceptional fourth quarter production performance is a demonstration of
the execution capability of Andrada's management team. We have made excellent
progress in realising the significant economies of scale inherent in this
uniquely large ore body.  We believe these economies of scale and the
bringing online of lithium production, will rapidly enhance the value of this
outstanding asset over the coming months.

The imminent completion of the bulk testing pilot facility will enable Andrada
to expedite the production of lithium, which could place the Company as one of
the foremost lithium producers on AIM. Concurrent drilling programmes on the
proximal pegmatites within the ML 134 licence area aim to increase the size
and confidence of this resource. Furthermore, the recently commenced drilling
programmes on adjacent licence areas are designed to confirm our belief that
the Erongo region is one of the emerging tech-metals provinces globally.
Andrada's significant first mover advantage is its ability to capitalise on
the existing proven operational footprint.

The completion of an inaugural Sustainability Report paves the way for Andrada
to not only be a producer of metals for the green transition but also  play
its role as a responsible and sustainable resource company of the future."

 

 

 

 

 

 

 

Operational summary

Table 1: Uis Mine actual quarterly production and cost performance

 Description                      Unit                 Q1 FY 2023  Q2 FY 2023  Q3 FY 2023*  Q4 FY 2023  FY       FY       YoY

                                                                                                        2023     2022     % Δ
 Plant availability               %                    89          89          73           90.4        86.8     88.1     ↓ 2
 Plant utilisation                %                    78          69          63           81.1        66.3     68.7     ↓ 4
 Plant processing rate            tph                  99          100         107          125         106      99       ↑ 7
 Ore processed                    t                    152,243     134,315     90,278       196,982     573,818  541,700  ↑ 6
 Feed grade                       % Sn                 0.149       0.145       0.140        0.154       0.154    0.148    ↑ 4
 Tin concentrate                  t                    239         214         145          361         960      780      ↑ 23
 Contained tin in concentrate     t                    152         133         87           214         587      482      ↑ 22
 Tin recovery                     %                    67          69          68           71          68       60       ↑ 13
 Uis mine operating C1 cost(1)    US$/t contained tin  17,624      22,903      30,907       14,761      19,762   21,839   ↓ 10
 Uis mine operating cash cost(2)  US$/t contained tin  20,989      25,245      33,207       17,303      22,287   25,209   ↓ 12
 Uis mine AISC³                   US$/t contained tin  23,526      29,282      38,570       18,236      24,939   27,515   ↓  9
 Tin price achieved               US$/t contained tin  34,367      22,975      22,625       25,265      25,051   38,604   ↓ 35

¹  C1 refers to operating cash costs per unit of production excluding the
selling expenses

(2) Operating cash cost is the C1 including selling expenses (logistics,
smelting and royalties), it excludes sustaining capital expenditure associated
with Uis Mine.

³ All-in sustaining cost incorporates all costs related to sustaining
production as well as the capital expenditure associated with developing and
maintaining the Uis operation, including pre-stripping waste mining costs.

* 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.

LITHIUM

Metallurgical testing update

The metallurgical test work programme is focussed on producing a lithium
concentrate suitable to both the industrial lithium market and the battery
feedstock market. Laboratory scale test work has established three suitable
technologies for beneficiating lithium in the ore, namely DMS, flotation and
sensor-based ore sorting.

 

Test results from Geolab Global, have repeatedly produced high-grade petalite
concentrate (± 90% petalite, > 4.0% Li₂O) displaying low contaminant
levels (< 0.05% Fe₂O₃, < 1.0% alkalis). The Company is now
conducting bulk scale DMS, flotation and ore sorting test work to optimise
metallurgical parameters and to determine ore variability. The results of the
bulk test work, and trials at the lithium pilot plant, will inform a
definitive feasibility study for lithium expansion to the current processing
plant.

Lithium pilot plant and tantalum circuit construction on schedule

The lithium pilot plant project is progressing to schedule, with the
completion of construction targeted for June 2023. The project is
approximately 60% complete with all long lead equipment ready for shipment to
the mine. The major plant equipment is being manufactured off-site and the
earthworks have been completed. The tantalum circuit construction is
approximately 50% complete and on track for full completion in June 2023.

Meanwhile, several early revenue options are being evaluated such as potential
output of a lithium concentrate from the lithium bulk testing facility.

Progress on the lithium exploration programme over the mining licences

Mining licence 129: B1 C1 pegmatites

Multiple exploration programmes were initiated during Q4. A drill programme
was initiated on the ML129 mining licence during January 2023 to investigate
the existence of spodumene mineralisation within the B1 and C1 pegmatites.
This on-going programme comprises 17 diamond drill holes and to date all
completed holes have yielded visual confirmation of spodumene within the
pegmatite intersections. The analysis of drill core will begin immediately
after the completion of the programme, targeted for end of March 2023.

Mining licence 133: Nai Nais pegmatites

A first-pass Reverse Circulation drilling programme will commence in April
2023 on the Nai-Nais (ML133) licence area to investigate the subsurface
continuation of lithium and tin mineralisation identified during the 2022
calendar year mapping and sampling programme. An infill surface exploration
programme started in January 2023 to enhance the data resolution and to
confirm the continuity of lithium mineralisation along an identified strike
length of 6km.

OPERATIONS

Successful modular expansion of existing operations

Tin concentrate production increased by 19% to 960 tonnes resulting in an 18%
increase of contained tin to 586 tonnes YoY confirming the success of the mine
expansion. This double-digit increase was achieved despite the requisite plant
shutdown that resulted in 35% loss of production in the third quarter (Q3") FY
2023. Production capacity has increased by approximately 70% because of the
expansion programme. The significantly higher tonnage output reduced operating
costs and AISC by 12% and 9% respectively YoY, confirming the view that large
scale bulk mining at Uis is amenable to favourable economies of scale.

Resource expansion

The Uis proximal drilling campaign, on the ML134 mining licence commenced in
February 2023 and aims to validate the historical drill information and
increase confidence in the mineral resource classification for tin. This
campaign will also provide initial information on the lithium and tantalum
endowment of these pegmatites. Approximately 78 drill holes have been planned
for an initial programme that targets the southern cluster, following which an
investigation will target the pegmatites north of the V1V2 resource. An
improvement in the mineral resource confidence classification will allow for
the inclusion of the proximal pegmatites into the techno-financial valuation
of the project.

FINANCE

Cash balance

The combined cash and cash equivalent balance on 28 February 2023 was GBP 8.6
million (USD 10.3 million), provides sufficient capital for the Company to
execute its near-term capital commitments for the pilot facility and tantalum
circuit, whilst in the interim the various conditions precedent for the
additional financing are being completed.

Orion Resource Partners ("Orion") and Development Bank of Namibia ("DBN")
funding update

The conditional finance arrangements for Orion and DBN, previously announced
on 5 July 2022, 15 September 2022, and 17 November 2022, have been combined
into a single legal workstream to reduce the timeline to financial closure.
The Company still expects to complete the process by the end of May 2023.
Further updates will be provided in due course.

EXECUTIVE STRUCTURE

Structural changes to align with strategic intent.

Andrada has strengthened its management structure by appointing Chris Smith as
the Chief Operations Officer, taking over from Frans Van Daalen, who has been
appointed to lead the business development strategy as the CSO from February
2023, both are non-board positions.

Chris Smith is a qualified chemist with a career spanning over 36 years at
various senior management levels in the mining and metallurgical industries.
He joined Andrada in 2020 as the General Manager in charge of operations,
during which time he successfully ramped up production ahead of the scheduled
timelines and improved safety performance by 60%. Chris has significant
experience in process optimisation and a proven track record of stimulating
operational performance. In the past six months, he has surpassed the targets
for plant expansion and will be instrumental in optimising the operational
processes for the next level of growth.

Frans Van Daalen is a qualified engineer with over 20 years of operational and
technical experience across multiple commodities. He was a co-founder and
director of VBKom, a mining and industrial engineering consultancy for
approximately 10 years. Frans joined the Company at inception and is well
placed to drive the Company's development as a significant global lithium
producer.

Glossary of abbreviations

 AISC  All in sustaining cost
 FY    Financial year for the period March to April
 GBP   British pound sterling
 Sn    Symbol for tin
 t     Tonnes
 tph   Tonnes per hour

Glossary of terms

 AISC                 Incorporates all costs related to sustaining production. Includes the
                      sustaining capital expenditure associated with developing and maintaining the
                      Uis operation such as unaudited stripping waste mining costs.
 Operating cash cost  Excludes the unaudited sustaining capital expenditure associated with
                      developing and maintaining the Uis operation.

 

 Andrada Mining Limited                       +27 (11) 268 6555
 Anthony Viljoen, CEO

 Sakhile Ndlovu, Head of Investor Relations
 Nominated Adviser                            +44 (0) 207 220 1666
 WH Ireland Limited

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

 Andrew Chubb

 Jay Ashfield
 Stifel Nicolaus Europe Limited               +44 (0) 20 7710 7600
 Ashton Clanfield

 Callum Stewart

 Varun Talwar
 Tavistock Financial PR (United Kingdom)      +44 (0) 207 920 3150
 Emily Moss

 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.

Lithium laboratory test work completed during the 2022 calendar year indicated
a high-grade, ultra-low iron lithium petalite concentrate. The test work to
convert lithium petalite concentrate to battery-grade lithium hydroxide was
initiated with Nagrom, a leading Australian processing company, and commercial
engagements with lithium petalite concentrate off - takers are on-going. 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 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 deep 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 how 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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