Mpama South a boost for Alphamin as tin prices drop
The tin price saw an aggressive price correction last week, at one point falling more than 20% in after-hours trading on the London Metal Exchange (LME). This significant drop affected all tin producers, including Alphamin, the largest African producer.
Despite the lower tin price, Alphamin’s Bisie mine in the Democratic Republic of the Congo (DRC) remains one of the top tin producers in the world. The company plans to nearly double tin production at the Bisie complex following a positive economic study into the Mpama South deposit. Alphamin started mining the Mpama North deposit at Bisie in 2019.
The tin price dropped from record highs of close to USD51,000/tonne a few months ago and closed at 44, 205/tonne late last week. Analysts expect the price to stabilise at lower levels in the coming weeks. According to the International Tin Association (ITT), the trigger for the price correction appears to have been a combination of profit taking and risk reduction related to problems in the LME nickel market.
But even at low tin prices, Bisie remains a top pick for investors. Mining the deposit Mpama South will not only increase production but will further extend the life of mine at Bisie with at least another 20 plus years.
Mpama South a high-grade target
Mpama North is one of the highest-grade tin discoveries in the world and produced more than 10 969 tonnes of tin-in-concentrate in 2021. Alphamin always knew that Mpama North would be the first in a number of mines along the Bisie Ridge, and that Mpama South would be the second mine in that series.
The Mpama South deposit has always been a target for Alphamin, and the company drilled 19 holes in the area in 2012 and 2013. Towards the end of 2020, Alphamin started a drilling program aimed at providing enough data to produce a maiden Mineral Resource Estimate (MRE). Alphamin announced the results recently. According to the MRE and economic study, Mpama South hosts some 70,000 tonnes of tin as Indicated and Inferred Resources at an average grade of 2.54% tin. For undeveloped projects, Mpama South is now the 16th largest in terms of contained tin but is the highest grade.
According to Alphamin, this tin will be mined at an annual rate of 7,232 tonnes tin, giving the mine a life of around 10 years. The Preliminary Economic Assessment, completed together with the maiden MRE, indicates that this metal will be mined at a cost of USD 15,188 per tonne. The company is already well-versed in the mining and processing method as it will be an exact replica of the existing method at Mpama North.
According to Alphamin CEO Maritz Smith, the Mpama North mine absorbs large, fixed costs, which facilitates incremental production from Mpama South at a competitive marginal cost.
Alphamin now holds the world’s eighth largest resource of tin between the Bisie two deposits: more than 291,400 tonnes of metal. The maiden MRE is only based on data until September 2021. Since then, Alphamin has drilled over 10,000 metres beyond the limits of the MRE.
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