Alphamin Resources — Mpama South continues the charge

Alphamin Resources (CN: AFM)

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Last close As at 25/01/2023

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Market capitalisation

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Research: Metals & Mining

Alphamin Resources — Mpama South continues the charge

Excluding an (exceptional) warrant charge, a superprofit tax and deferred tax, post-tax profits in Q421 were within US$0.6m (or 1.3%) of our prior quarterly net profit forecast (US$44.2m) and resulted in a maiden dividend of C$0.03/share for the year. Contained tin production and sales guidance for FY22 remains unchanged at 12,000 tonnes, which is in line with the company’s operational performance in Q122. In addition, Alphamin has also announced the start of development of the Mpama South project.

Metals & Mining

Alphamin Resources

Mpama South continues the charge

Q421/FY21 results

Metals & mining

13 April 2022

Price

C$1.15

Market cap

C$1,463m

C$1.2640/US$

Net cash (US$m) at end-December 2021, including US$4.2m in lease liabilities and US$1.2m in unamortised fees

68.2

Shares in issue

1,271.9m

Free float

42%

Code

AFM

Primary exchange

TSX-V

Secondary exchange

JSE AltX

Share price performance

%

1m

3m

12m

Abs

(3.4)

18.6

105.4

Rel (local)

(4.5)

16.8

81.6

52-week high/low

C$1.20

C$0.56

Business description

Alphamin Resources owns (84.14%) and operates the Bisie tin mine at Mpama North in the North Kivu province of the Democratic Republic of the Congo with a grade of c 4.5% tin (the world’s highest). Accounting for c 4% of global mined supply, it is the second largest tin mine in the world outside China and Indonesia.

Next events

Q122 results

11 May 2022

Q222 results

August 2022

Q322 results

November 2022

Q422/FY22 results

March 2023

Analyst

Ashbourne

+44 (0)20 3077 5724

Excluding an (exceptional) warrant charge, a superprofit tax and deferred tax, post-tax profits in Q421 were within US$0.6m (or 1.3%) of our prior quarterly net profit forecast (US$44.2m) and resulted in a maiden dividend of C$0.03/share for the year. Contained tin production and sales guidance for FY22 remains unchanged at 12,000 tonnes, which is in line with the company’s operational performance in Q122. In addition, Alphamin has also announced the start of development of the Mpama South project.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(US$)

DPS
(US$)

P/E
(x)

Yield
(%)

12/20

187

(1)

(0.01)

0.00

N/A

N/A

12/21

353

132

0.04

0.02

22.6

2.6

12/22e

520

315

0.12

0.05

7.7

5.1

12/23e

542

328

0.15

0.05

6.0

6.0

Note: *PBT and EPS (fully diluted) are as reported.

Mpama South maiden resource and PEA

In addition to its financial results, Alphamin has announced (1) a maiden (and updated) resource at its adjacent Mpama South prospect, (2) the initial outcomes of a preliminary economic assessment (PEA) and (3) that it has decided to start development of the project this year. The Mpama South resource amounts to 4.27Mt of ore at a grade of 2.47% tin containing 105.5kt of tin, which Alphamin estimates it can put into production at a rate of 468ktpa to produce 7,232t tin per annum (cf Mpama North c 12,000t tin per annum). According to the International Tin Association’s Tin Industry Review 2020, this makes the Mpama South resource the second highest grade and one of the largest publicly reported CRIRSCO tin mineral resources globally. Assuming that commercial production starts in FY24, we estimate that Mpama South could add 8c/share to Alphamin’s earnings, 9c/share to its (maximum potential) dividends and that it is worth an immediate US$0.299 per share to the company on an attributable basis.

Forecast net cash sufficient to fund Mpama South

Barring the exceptional and the extraordinary, with reported net cash on its balance sheet of US$129.5m as at end-Q222, Alphamin has sufficient cash on its balance sheet to both develop Mpama South and pay a materially increased dividend in FY22 (currently the basis of our financial forecasts, above).

Valuation: Exploration opens way to C$2.49/share

Taking Mpama North and Mpama South together and assuming that the current three-month price of tin (US$42,793/t cf US$38,432/t in Q421) prevails for the remainder of Bisie’s life (ie adopting the current tin price as our long-term price), we calculate a value for Alphamin (excluding blue-sky exploration potential) of 125.1 US cents, or 158.1 Canadian cents, per share. However, with further ongoing exploration success, we estimate that this valuation could rise to potentially as high as US$1.98/share (C$2.49/share).

Alphamin Resources is a research client of Edison Investment Research Limited

Q421/FY21 and Q122 results

Alphamin’s Q421 financial results were released in the context of known operating results, which were announced on 11 January. Subsequently, on 4 April, Alphamin announced its operational performance for Q122. Both are summarised in the table below relative to prior quarters.

Exhibit 1: Alphamin operating results, Q320–Q122

Q320

Q420

Q121

Q221

Q321

Q421e

Q421a

*Change
(%)

**Variance
(%)

Q122a

***Change

(%)

Tonnes processed

96,086

93,560

93,997

105,294

108,901

108,000

107,981

-0.8

0.0

105,565

-2.2

Tin grade (%)

3.8

4.2

3.8

3.2

3.5

3.4

3.9

+11.4

+14.7

3.7

-5.1

Contained tin (t)

3,651

3,930

3,572

3,369

3,812

3,638

4,211

+10.5

+15.8

3,924

-6.8

Overall plant recovery (%)

71

74

74

72

75.2

78

75

-0.3

-3.8

78

+4.0

Actual payable tin produced (t)

2,563

2,898

2,611

2,412

2,832

2,850

3,114

+10.0

+9.3

3,061

-1.7

Payable tin sold (t)

2,695

2,306

3,351

2,404

2,710

2,850

3,056

+12.8

+7.2

3,336

+9.2

Tin price achieved (US$/t)

17,436

18,497

23,083

28,308

33,704

36,916

38,084

+13.0

+3.2

43,813

+15.0

Source: Alphamin Resources. As reported. Note: *Q421 cf Q321; **Q321a cf Q421e; ***Q122 cf Q421.

Alphamin’s underlying financial results for Q421/FY21 are provided in Exhibit 2, below. A number of features of both its operational and financial performance are noteworthy:

Plant throughput held steady at higher levels and was very close to our prior expectations for Q4. This performance continued into Q122, albeit at a slightly lower grade (as expected).

Metallurgical recovery of 78% in Q122 represented a new record for the plant.

There was a noticeable sale of material out of inventory in Q122 – that is to say sales exceeded production by 9.0% (or 275t) during the quarter. However, this is a relatively common feature of Bisie’s operational performance in the first quarter of the year, as inventories that are conventionally built up in the fourth quarter as a result of the disruptions on account of the rains in North Kivu are unwound in the following three-month period.

All-in sustaining costs (AISC) in Q421 increased 2.4% quarter-on-quarter to US$15,117/t, driven by a 10.7% increase in unit off-mine costs (note that off-mine costs are inextricably linked to the tin price in the form of royalties, export duties, marketing fees and smelter deductions etc) and unit sustaining capex, but largely offset by a 7.5% reduction in unit on-mine costs (per tonne of tin sold). Note that the AISC in Q122 is anticipated to have been ‘in line’ with Q421.

Alphamin’s operational performance was achieved by significantly improved underground mining practices since mid-July 2021, relating to stope planning, delineation and blasting. This resulted in the average tin grade in Q421 increasing from both the 3.5% of the previous quarter and the 3.8% recorded in August and September.

EBITDA of US$74.3m in Q421 fractionally exceeded prior guidance of US$74.0m, which itself represented a 37.8% increase relative to Q321. EBITDA guidance of US$98.0m for Q122 nevertheless represents a new quarterly record.

Excluding a US$6.9m warrant charge (which we habitually decline to attempt to forecast on a quarterly basis), pre-tax profits in Q421 were US$4.3m (or 7.2%) ahead of our prior expectations; however, this outperformance at the operational and pre-tax level was reversed by a relatively large current tax charge, which was US$19.8m in excess of our prior forecast – albeit augmented by a US$14.8m DRC ‘superprofit’ tax levied in the final quarter. Superprofit taxes are triggered when the average sales price for the year exceeds the tin price used in the DRC feasibility study by more than 25%. For these purposes, in instances in which excédent brut d’exploitation (an OHADA, or Francophone Africa, accounting concept that is analogous to EBITDA) for the year is more than 25% higher than that stipulated in the feasibility study, then a superprofit tax of an additional 20% applies, taking the effective tax rate on that incremental portion of profit from 30% to 50%. As a result of the imposition of the superprofit tax, Alphamin’s effective tax rate in Q4 amounted to 55.1% excluding the warrant charge, or 61.7% including the warrant charge. However, this, in part, reflected the fact that the superprofit tax charged in Q421 relates to the full year, but was only levied in Q4. Overall, excluding the warrant charge (but including the superprofit tax), the effective rate of tax for Alphamin in FY21 was 43.1%. In the absence of the warrant charge, the superprofit tax and deferred tax, post-tax profits would otherwise have been within US$0.6m (or 1.3%) or our prior quarterly net profit forecast of US$44.8m (see Exhibit 2, below). Note that, in the medium term, the company expects, subject to sufficient exploration success, to submit further DRC feasibility studies that should mitigate the impact of future superprofit taxes. In the meantime, however, we have attempted to forecast the effect of near-term superprofits taxes on both earnings and cash flows in Exhibits 3 and 11, below.

Alphamin’s net cash position (including lease liabilities) in Q421 improved by US$67.2m from US$1.0m to US$68.2m (before a positive adjustment of US$1.2m for unamortised fees). This performance followed an increase in net cash (or a decline of net debt) on the same basis of US$30.5m in Q321, US$17.0m in Q221 and US$11.0m in Q121. As a consequence, after the year end, the board resolved to declare an FY21 dividend of C$0.03 per share (approximately US$30m in aggregate), which was paid to shareholders on 11 February 2022. Net cash was then reported to have improved by a further US$61m to US$129.5m in Q122 (post dividend).

Exhibit 2, below, provides an analysis of Alphamin’s underlying financial results for Q421 relative to both Q321 and our prior expectations:

Exhibit 2: Edison forecast of Alphamin income statement, Q121–Q421 (US$ unless otherwise indicated)

Q121

Q221

Q321

Q421e

Q421a

Change
(%)

Variance
(%)

FY21

Revenue

76,032,045

68,053,576

91,350,482

105,209,384

117,447,117

28.6

11.6

352,883,220

Cost of goods sold

(37,256,106)

(29,780,333)

(32,384,856)

(33,651,013)

(38,796,112)

19.8

15.3

(138,217,407)

Depreciation

6,380,606

6,423,261

6,790,732

6,897,328

7,037,866

3.6

2.0

26,632,465

Gross profit

32,395,333

31,849,982

52,174,894

64,661,044

71,613,139

37.3

10.8

188,033,348

General and administrative

(4,549,884)

(4,729,496)

(5,280,772)

(5,280,772)

(5,193,778)

-1.6

-1.6

(19,753,930)

Operating profit/(loss)

27,845,449

27,120,486

46,894,122

59,380,272

66,419,361

41.6

11.9

168,279,418

Other

 

 

Warrants

Excl*

Excl*

Excl*

Excl*

Excl*

 

 

Excl*

Profit on foreign exchange

16,595

(45,653)

(123,440)

(721,162)

484.2

N/A

(873,660)

Loss on write off of assets

0

0

0

0

N/A

N/A

0

Interest expense

(2,648,401)

(2,280,673)

(1,782,310)

(1,647,775)

-7.5

N/A

(8,359,159)

Interest income

11

298

422

652

54.5

N/A

1,383

Net interest

(2,648,390)

(2,280,375)

(1,781,888)

345,445

(1,647,123)

-7.6

-576.8

(8,357,776)

Profit before taxes

25,213,654

24,794,458

44,988,794

59,725,716

64,051,076

42.4

7.2

159,047,982

Current income tax expense

(11,113)

(11,499)

(9,907,336)

(14,931,429)

(34,696,810)

250.2

132.4

(44,626,758)

Deferred tax movement

(8,713,199)

(9,588,773)

(5,051,594)

(577,662)

-88.6

N/A

(23,931,228)

Total tax

(8,724,312)

(9,600,272)

(14,958,930)

(14,931,429)

(35,274,472)

135.8

136.2

(68,557,986)

Effective tax rate (%)

34.6

38.7

33.3

25.0

55.1

65.5

120.4

43.1

Net profit/(loss)

16,489,342

15,194,186

30,029,864

44,794,287

28,776,604

-4.2

-35.8

90,489,996

Net profit/(loss) attributable to:

 

 

Shareholders

13,639,017

15,194,186

25,031,864

37,689,913

21,262,438

-15.1

-43.6

75,127,505

Non-controlling interests

2,850,325

0

4,998,000

7,104,374

7,514,166

50.3

5.8

15,362,491

Minority (%)

17.29

0.00

16.64

15.86

26.1

56.9

64.6

17.0

Total

16,489,342

15,194,186

30,029,864

44,794,287

28,776,604

-4.2

-35.8

90,489,996

 

 

Weighted average no. shares

1,182,251,580

1,188,156,191

1,188,156,191

1,193,945,424

1,228,300,697

3.4

2.9

1,195,135,996

Derivatives

119,536,582

95,621,651

99,333,451

95,502,832

26,694,586

-73.1

-72.0

90,280,313

Fully diluted weighted average no. shares

1,301,788,162

1,283,777,842

1,287,489,642

1,289,448,256

1,254,995,283

-2.5

-2.7

1,285,416,309

 

 

Headline earnings

8,002,190

4,900,644

20,911,936

37,689,913

14,390,320

1.7

-43.6

48,205,090

Headline earnings (excl. warrant charge)

13,639,017

15,194,186

25,031,864

37,689,913

21,262,438

-15.1

-43.6

75,127,505

 

 

EPS (US$/share)

0.0115

0.0128

0.0211

0.0316

0.0173

-18.0

-45.3

0.0629

Diluted EPS (US$/share)

0.0105

0.0118

0.0194

0.0292

0.0169

-12.9

-42.1

0.0584

HEPS** (US$/share)

0.0115

0.0128

0.0211

0.0316

0.0173

-18.0

-45.3

0.0629

Diluted HEPS** (US$/share)

0.0105

0.0118

0.0194

0.0292

0.0169

-12.9

-42.1

0.0584

Source: Alphamin, Edison Investment Research. Note: Company presented basis. *Excluded; actual Q421 charge US$6,872,118; **Headline earnings per share.

Outlook

At the time of its Q221 results, Alphamin updated its guidance for the remainder of FY21 and H122. In the light of the lower grades encountered in Q221, it expected to mine lower tin grades averaging 3.2–3.5% in H221 and into Q122, which, at higher plant recoveries of 78% (including the fine tin recovery plant) and monthly throughput of 36,000t, suggested contained tin production of 900–1,000t per month. The grade of ore mined was then expected to increase to an average of 4.0% from Q222 onwards. As per Alphamin’s Q421/FY21 production update of 11 January, contained tin production and sales guidance for the financial year ending December 2022 remains 12,000 tonnes (cf Edison’s prior forecast of 11,711t).

Quarterly estimates for Alphamin in FY22 in the light of Q421 financial results and Q122 operational results are provided in the table below, with the caveat that the quarterly results of junior mining companies can be prone to material volatility relative to both historical results and analysts’ forecasts. At the time of writing, the current three-month price of tin is US$42,793/t and, for the purposes of forecasting, we have assumed this price will prevail for the remainder of the year. As noted previously, in this case, Edison has also attempted to forecast the likely effects of the application of ongoing superprofits tax assessments on Alphamin’s financial performance for the remainder of the year.

Exhibit 3: Edison forecast of Alphamin income statement, Q122e–Q422e (US$ unless otherwise indicated)

Q122e

Q222e

Q322e

Q422e

FY22e
(current)

FY22e
(prior)

Tons processed (t)

105,565

100,275

100,275

100,275

406,390

401,100

Tin grade (%)

3.7

3.7

3.8

3.8

3.76

3.71

Contained tin (t)

3,924

3,660

3,846

3,846

15,276

14,871

Overall plant recovery (%)

78

79

79

79

78.6

78.7

Actual payable tin produced (t)

3,061

2,882

3,028

3,028

12,000

11,711

Payable tin sold (t)

3,336

2,882

3,028

3,028

12,275

11,607

Tin price achieved (US$/t)

43,813

42,298

42,338

42,338

42,331

38,084

Revenue

146,160,168

120,481,514

126,483,614

126,483,614

519,608,909

442,031,699

Cost of goods sold

(42,966,390)

(34,701,694)

(35,489,571)

(35,501,448)

(148,659,103)

(141,806,539)

Depreciation

7,531,245

8,024,625

8,518,004

9,011,383

33,085,257

28,023,104

Gross profit

95,662,533

77,755,196

82,476,038

81,970,783

337,864,550

272,202,056

General and administrative

(5,193,778)

(5,193,778)

(5,193,778)

(5,193,778)

(20,775,112)

(21,123,088)

Operating profit/(loss)

90,468,755

72,561,418

77,282,260

76,777,005

317,089,438

251,078,968

Other

98,000,000

Warrants

0

0

0

0

0

0

Profit on foreign exchange

0

0

Loss on write off of assets

0

0

Interest expense

0

0

Interest income

0

0

Net interest

(500,000)

(500,000)

(500,000)

(500,000)

(2,000,000)

209,469

Profit before taxes

89,968,755

72,061,418

76,782,260

76,277,005

315,089,438

251,288,438

Current income tax expense

(38,686,565)

(30,986,410)

(33,016,372)

(32,799,112)

(135,488,458)

(62,822,109)

Deferred tax movement

0

0

Total tax

(38,686,565)

(30,986,410)

(33,016,372)

(32,799,112)

(135,488,458)

(62,822,109)

Effective tax rate (%)

43.0

43.0

43.0

43.0

43.0

25.0

Net profit/(loss)

51,282,190

41,075,008

43,765,888

43,477,893

179,600,979

188,466,328

Attributable to

Shareholders

43,148,835

34,560,512

36,824,618

36,582,299

151,116,264

158,575,569

Non-controlling interests

8,133,355

6,514,496

6,941,270

6,895,594

28,484,715

29,890,760

Minority (%)

15.86

15.86

15.86

15.86

15.86

15.86

Total

51,282,190

41,075,008

43,765,888

43,477,893

179,600,979

188,466,328

Weighted average number of shares in period

1,267,257,770

1,271,859,570

1,271,859,570

1,271,859,570

1,270,709,120

1,193,945,424

Derivatives

17,490,986

17,490,986

17,490,986

17,490,986

17,490,986

95,502,832

Fully diluted weighted average number of shares in issue

1,284,748,756

1,289,350,556

1,289,350,556

1,289,350,556

1,288,200,106

1,289,448,256

Headline earnings

43,148,835

34,560,512

36,824,618

36,582,299

151,116,264

158,575,569

Headline earnings (excl. warrant charge)

43,148,835

34,560,512

36,824,618

36,582,299

151,116,264

158,575,569

EPS (US$/share)

0.0340

0.0272

0.0290

0.0288

0.1189

0.1328

Diluted EPS (US$/share)

0.0336

0.0268

0.0286

0.0284

0.1173

0.1230

HEPS (US$/share)

0.0340

0.0272

0.0290

0.0288

0.1189

0.1328

Diluted HEPS (US$/share)

0.0336

0.0268

0.0286

0.0284

0.1173

0.1230

Headline EPS excl. warrant charge (US$/share)

0.0340

0.0272

0.0290

0.0288

0.1189

0.1328

Source: Alphamin, Edison Investment Research. Note: Company presented basis.

Among other things, readers should note that we are forecasting a sharp decline in interest expenses as debt (all of which is due within 12 months) is paid off. In addition, all outstanding warrants as at end-December 2021 are now reported to have been exercised in January 2022 with the result that the customary quarterly warrant charge incurred by Alphamin should also now disappear from Q222.

Valuation: Mpama North

Assuming the current three-month price of tin (US$42,793/t cf US$39,020/t previously) prevails for the remainder of Bisie’s life (ie adopting the current tin price as our long-term price), we calculate a valuation for Alphamin (based on Mpama North only and excluding any blue-sky exploration potential) of 95.19 US cents (cf 86.1c previously), or 120.3 Canadian cents (cf 109.7c previously) per share. Note that this valuation assumes the execution of the Bisie life of mine schedule according to plan and applies a 10% discount rate to forecast dividends.

Mpama North valuation sensitivities

Exploration and mine life extensions

A key sensitivity for Alphamin is its exposure to exploration success. Alphamin’s processing schedule follows its mining schedule closely. As this drops away towards the end of the life of the mine, so too do production, earnings and cash flow. To the extent that Alphamin is successful in its exploration at Mpama North and Mpama South in keeping its plant in full production at FY27 levels into the future (see Alphamin’s latest announcements: Alphamin announces maiden mineral resource estimate and positive preliminary economic assessment for Mpama South, released on 8 March 2022, and Alphamin reports high grade exploration assay results at Mpama North mine and Mpama South development project, released on 22 March, and below), our valuation of the company (calculated at the prevailing tin price) would increase as follows:

Exhibit 4: Alphamin valuation sensitivity to exploration success (Mpama North only)

Additional years at full capacity

To year

Valuation
(US$/share)

Valuation
(C$/share)

Incremental change (C$/share)

0.9519

1.2031

0

2027

0.9298

1.1753

-0.0278

+1

2028

0.9742

1.2313

+0.0560

+2

2029

1.0274

1.2986

+0.0673

+3

2030

1.0661

1.3476

+0.0490

+4

2031

1.1021

1.3931

+0.0455

+5

2032

1.1548

1.4597

+0.0666

Source: Edison Investment Research

For the purposes of this valuation, we have assumed an ongoing exploration commitment at Alphamin of c US$20m initially, dropping back to US$2.7m per year to achieve the replenishment of reserves and resources required to keep the mine operating at full capacity.

On average, therefore, each additional year by which the plant is maintained at full capacity (in the short term) adds an average of 5.69 Canadian cents per share to our valuation of Alphamin (at the prevailing tin price). In the limiting case in which exploration success is sufficient to maintain production at FY27 levels indefinitely (which, for these purposes may be taken to mean c 52 years), our valuation of Alphamin rises to US$1.98/share (cf US$1.92/share previously), or C$2.487/share (cf C$2.408/share previously).

Mpama South maiden and updated resource

Coincident with its Q421/FY21 results, Alphamin announced both a maiden resource estimate at Mpama South and the results of a simultaneous PEA for the project. Mpama South’s maiden resource was then updated (and upgraded) once again, on 29 March. At the same time, the company also announced a decision to start the development of the project in order to capitalise on the current favourable tin market fundamentals and its ability to self-fund the project.

A summary of the (updated and upgraded) resource at Mpama South within the context of the existing resource at Mpama North is as follows:

Exhibit 5: Mpama South maiden resource cf existing Mpama North resources and reserves

Resources

Reserves

Attributable

Tonnage

(Mt)

Grade

(% Sn)

Contained tin (kt)

Category

Tonnage

(Mt)

Grade

(% Sn)

Contained tin (kt)

Ownership

(%)

Resources

(kt Sn)

Reserves

(kt Sn)

Bisie Mpama North

Measured

0.33

4.75

15.60

Proven

0.05

3.77

1.89

84.14

13.13

1.59

Indicated

3.99

4.59

183.40

Probable

3.28

4.01

131.49

84.14

154.31

110.64

Inferred

0.48

4.57

21.80

Possible

84.14

18.34

0.00

Total

4.80

4.60

220.80

Total

3.33

4.01

133.38

84.14

185.78

112.23

Bisie Mpama South

Measured

0.00

0.00

0.00

84.14

0.00

0.00

Indicated

0.85

2.55

21.68

84.14

18.24

0.00

Inferred

3.42

2.45

83.79

84.14

70.50

0.00

Total

4.27

2.47

105.47

84.14

88.74

0.00

Bisie total

Measured

0.33

4.75

15.60

Proven

0.05

3.77

1.89

84.14

13.13

1.59

Indicated

4.84

4.24

205.08

Probable

3.28

4.01

131.49

84.14

172.55

110.64

Inferred

3.90

2.71

105.59

Possible

84.14

88.84

0.00

Total

9.07

3.60

326.26

Total

3.33

4.01

133.38

84.14

274.52

112.23

Change (%)

Measured

0.00

0.00

0.00

Indicated

21.30

-7.69

11.82

Inferred

712.50

-40.76

384.43

Total

88.96

-21.80

47.76

Source: Alphamin Resources, Edison Investment Research. Note: Estimated using Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Best Practice Guidelines (2019) and is reported in accordance with the 2014 CIM Definition Standards.

The initial maiden mineral resource was estimated from 79 drillholes totalling 23,109m (average 293m per hole) and was reported at a base case tin grade of 1.0%, which satisfied the requirement for reasonable prospects for economic extraction. However, it excluded the substantial quantity of subsequent drilling completed since September 2021 in Phases 4 and 5 of Alphamin’s exploration campaign, which yielded similarly positive results (see below) with characteristic high-grade visual cassiterite in many of the drillholes. Over 40 drillholes and over 10,000m were subsequently drilled beyond the limits of the maiden mineral resource in Phase 3 of Alphamin’s campaign and further updates will be released throughout the year as the drilling phases progress and assays are received. Compared with the original maiden resource however, which was delineated from 79 drill holes (at a rate of c 35kt resource tonnage per hole), the subsequent update on 29 March (of 1.48Mt) was delineated from a further 21 additional holes (at a rate of c 70kt per hole). Pro rata therefore, the remaining 26 holes for which assays have yet to be received could add a further 1.8Mt to resources at Mpama South when Alphamin’s next update is released. Either way however, it is notable that, in terms of tonnage, the resource at Mpama South is now comparable to that at Mpama North and it therefore might be supposed would support a mine life of comparable duration.

According to the International Tin Association’s Tin Industry Review 2020, Mpama South’s maiden resource (prior to its upgrade) ranked it as the second highest grade publicly reported CRIRSCO tin mineral resource globally and one of the largest in terms of contained tin.

In-situ valuation considerations

Alphamin’s resource multiple immediately prior to its Mpama South maiden resource announcement was US$5,573 per tonne of attributable in-situ tin. On this basis, the value of Mpama South to Alphamin would be US$494.6m (or 38.9 US cents per share).

However, US$5,573/t as an in-situ resource (based on Mpama North) is likely to over-state the value of Mpama South’s resources as it is a post-investment valuation. In this case, we calculate from Alphamin’s balance sheet that the company was required to make a (fully consolidated) investment of US$1,093 per tonne of in-situ resource (including exploration) in order to achieve this valuation. Netting this investment off against the original valuation suggests a pre-investment valuation for Mpama North of US$4,480/t. On this basis, the attributable value of Mpama South to Alphamin would be US$397.6m (or 31.3 US cents per share). This may be seen within the context of the evolution of valuation of Mpama North’s resources as the mine transitioned into production in H219:

Exhibit 6: Mpama North resource valuation evolution, by year

Year end

2019

2020

2021

EV per attributable resource tonne (US$)

1,051

2,188

5,573

Balance sheet value of investment required to achieve valuation (US$/t)

1,166

1,097

1,093

Implied pre-investment valuation of resources (US$/t)

(115)

1,092

4,480

Implied valuation of Mpama South at pre-investment multiple shown (US$m)

(10.2)

96.9

397.6

Calculated discovery cost per resource tonne (US$/t)

10.47

13.83

61.41

Source: Edison Investment Research. Note: EV denotes Alphamin’s enterprise value.

By this measure, Mpama North’s resources were of relatively little pre-investment value to the company before they were put into production (in 2019). That is to say, they were worth approximately what the company had invested historically to both find them and develop them. This may also be seen from the company’s share price, which traded around net asset value prior to FY20. However, this value subsequently increased very sharply – to US$5,573/t – as those same resources were brought to profitable account. This US$5,573/t value may also therefore be interpreted within the context of the selling price of Alphamin’s tin (of US$30,629/t in FY21) and its all-in sustaining cost of sales of US$14,173/t in FY21. In the meantime, in Mpama South’s favour is the fact that Alphamin’s management has already proved that it is capable of building a mine and successfully bringing it into production in North Kivu – thereby lowering risk.

In the immediate aftermath of its Mpama South maiden resource announcement on 7 March, Alphamin’s resource multiple fell from US$5,573/t to US$4,191/t. It remained at approximately this level until its resource update on 29 March. All other things being equal however (and with no pro rata adjustment in its share price), in the wake of its 29 March update, at Alphamin’s current price and forex rates, it will have fallen to US$3,947/t (or 9.2% of the prevailing price of tin cf Alphamin’s gross margin of 60.8% in FY21).

Readers should note that Alphamin’s calculated discovery cost of US$61.41/t in FY21 probably overstates the cost for Mpama North resources in that Mpama North resources only would have been delineated at that point, but some of the costs associated with Mpama South would also have been recognised on Alphamin’s balance sheet by that time as well. This could be indicative of the fact that, tonne for tonne (of contained tin), Mpama South’s resources are more expensive to discover than Mpama North’s. Either way however, it should be noted that the cost of resource discovery and delineation is negligible within the context both of the overall development of the deposit and its potential value once put into profitable production.

Preliminary economic assessment (PEA)

At the same time as it announced its maiden resource, Alphamin also announced the results of a PEA of Mpama South. The PEA encompassed a number of mining, metallurgical, environmental and regulatory studies, which together demonstrated the potential to expand production at Bisie by leveraging the infrastructure at Mpama North (eg power, water, site access, underground infrastructure and personnel) to build a second mine and dedicated second lookalike processing plant and mine portal at Mpama South. The main findings of the PEA were as follows:

Exhibit 7: Mpama South PEA outcomes

Item

Value

Total run-of-mine ore processed

2,068kt

Average annual run-of-mine ore mined and processed

468kt

Average annualised run-of-mine grade

2.21%

Processing recovery

70.0%

Average annualised contained tin produced

7,232t

Average annualised AISC per tonne tin sold*

US$15,188/t

Average annualised EBITDA*

US$187.31m

Development capital

US$115.97m

Construction timeline

20 months

Item

Total run-of-mine ore processed

Average annual run-of-mine ore mined and processed

Average annualised run-of-mine grade

Processing recovery

Average annualised contained tin produced

Average annualised AISC per tonne tin sold*

Average annualised EBITDA*

Development capital

Construction timeline

Value

2,068kt

468kt

2.21%

70.0%

7,232t

US$15,188/t

US$187.31m

US$115.97m

20 months

Source: Alphamin Resources. Note: *At US$40,000/t tin price; 100% basis.

The PEA is necessarily preliminary in nature. It included, for example, a portion of the inferred mineral resource that ordinarily would be regarded as too speculative geologically to be considered mineral reserves. In this case however – and in the light of the resource upgrade on 29 March and ongoing drilling – we believe that it might very well prove too conservative and that ultimate resources at Mpama South may well be capable of supporting a mine life in excess of seven years. On this basis, an analysis of Mpama South’s (implied) reserve conversion rate relative to that of Mpama North is as follows:

Exhibit 8: Mpama South reserve conversion analysis (cf Mpama North)

Resources

Reserves

Conversion (%)

Category

Tonnage
(Mt)

Grade
(% Sn)

Contained tin (kt)

Category

Tonnage
(Mt)

Grade
(% Sn)

Contained tin (kt)

Tonnes

Grade

Contained tin

Mpama North

Measured

0.33

4.75

15.60

Proven

0.05

3.77

1.89

15.2

79.4

12.1

Indicated

3.99

4.59

183.40

Probable

3.28

4.01

131.49

82.2

87.4

71.7

Inferred

0.48

4.57

21.80

Possible*

0.0

0.0

0.0

Total

4.80

4.60

220.80

Total

3.33

4.01

133.38

69.4

87.1

60.4

Mpama South

Measured

0.00

0.00

0.00

Proven

0.00

0.00

0.00

N/A

N/A

N/A

Indicated

0.85

2.55

21.68

Probable

0.85

2.55

21.68

100.0

100.0

100.0

Inferred

3.42

2.45

83.79

Possible*

2.36

2.09

49.22

68.9

85.2

58.7

Total

4.27

2.47

105.47

Total

3.21

2.21

70.90

75.1

89.5

67.2

Source: Edison Investment Research, Alphamin Resources. Note: *Archaic.

Readers should note that the ‘possible’ category of reserves no longer exists and has been resurrected in Exhibit 9 merely as an instrument for demonstrating the required conversion of Mpama South’s inferred resources into reserves in order to render the mine schedule assumed by Edison achievable. In this case, it may be seen that while the required overall reserves:resources conversion factor for Mpama South is comparable to that for Mpama North, 68.9% of the resource tonnes and 58.7% of the contained tin in the inferred category of Mpama South’s resources will also need to be upgraded (probably first into the indicated category of resources and then into the probable category of reserves) in order to allow the execution of the mine schedule according to Edison’s assumptions. With this caveat, it is possible to construct a financial model for the project and to derive a valuation for it.

For these purposes, and given the company’s decision to start developing the project, we have assumed that the period of construction will run for 20 months, and that the mine will then enter production late in FY23 or early in FY24, which is in line with company’s guidance. All other parameters are otherwise adjusted to reflect the tin price of US$42,793/t used elsewhere in this report, on which basis it is possible to estimate the income statement relating to Mpama South alone for Alphamin from the start of commercial production in FY24 as follows:

Exhibit 9: Forecast life of mine Mpama South income statement

2024

2025

2026

2027

2028

2029

2030

Revenue (US$)

258,163,659

302,051,481

302,051,481

302,051,481

302,051,481

302,051,481

302,051,481

Cash costs (US$)

78,513,559

91,860,864

91,860,864

91,860,864

91,860,864

91,860,864

91,860,864

Royalty (US$)

13,682,674

16,008,728

16,008,728

16,008,728

16,008,728

16,008,728

16,008,728

Gross profit (US$)

165,967,426

194,181,888

194,181,888

194,181,888

194,181,888

194,181,888

194,181,888

Depreciation (US$)

15,909,223

19,000,001

19,529,384

20,191,112

21,073,416

22,396,872

25,043,784

Operating profit (US$)

150,058,203

175,181,887

174,652,505

173,990,777

173,108,473

171,785,017

169,138,105

Other (US$)

EBIT (US$)

150,058,203

175,181,887

174,652,505

173,990,777

173,108,473

171,785,017

169,138,105

Interest income (US$)

Interest expense (US$)

Net interest (US$)

0

0

0

0

0

0

0

PBT (US$)

150,058,203

175,181,887

174,652,505

173,990,777

173,108,473

171,785,017

169,138,105

Tax (US$)

45,017,461

52,554,566

52,395,751

52,197,233

51,932,542

51,535,505

50,741,431

Tax rate (%)

30.0

30.0

30.0

30.0

30.0

30.0

30.0

PAT (US$)

105,040,742

122,627,321

122,256,753

121,793,544

121,175,931

120,249,512

118,396,673

Minority (US$)

16,659,462

19,448,693

19,389,921

19,316,456

19,218,503

19,071,573

18,777,712

Minority (%)

15.86

15.86

15.86

15.86

15.86

15.86

15.86

Profit attributable to shareholders (US$)

88,381,280

103,178,628

102,866,832

102,477,088

101,957,428

101,177,939

99,618,961

Dividend (US$)

0

111,626,903

117,071,744

117,238,777

117,461,488

117,795,555

118,463,689

Retained earnings (US$)

88,381,280

-8,448,275

-14,204,912

-14,761,689

-15,504,060

-16,617,616

-18,844,728

EPS (US$ per Alphamin share)

0.0695

0.0811

0.0809

0.0806

0.0802

0.0796

0.0783

Diluted EPS (US$ per Alphamin share)

0.0685

0.0800

0.0798

0.0795

0.0791

0.0785

0.0773

DPS (US$ per Alphamin share)

0.0000

0.0878

0.0920

0.0922

0.0924

0.0926

0.0931

Source: Edison Investment Research

While not shown here, predicted balance sheets and cash flow statements for the Mpama South project have also been calculated, albeit with the caveat that, at the current time, no consideration has been paid to fluctuations in working capital, which is a refinement that will be made at a later stage.

On the basis of the above income statement, it is possible to calculate the following valuations for Mpama South to Alphamin (ie after a 15.86% minority has been accounted for) at Edison’s customary 10% discount rate:

A discounted dividend valuation of US$380.6m, or US$0.299/share or US$3,609 per tonne of in-situ Mpama South contained tin.

A discounted cash-flow valuation of US$363.3m, or US$0.286/share or US$3,445 per tonne of in-situ Mpama South contained tin.

For the purposes of the ‘per tonne’ valuations above, Edison has applied the Mpama South contained tin resource on a 100% (rather than attributable) basis. While this treatment appears irregular, it provides investors with an indication of how much extra value additional tonnes delineated at Mpama South in the future may be worth to Alphamin. Either way, however, it is notable the extent to which the ‘per tonne’ valuations above reconcile with the in-situ valuations calculated previously.

Consolidated valuation and tin price sensitivity

Considering Mpama North and Mpama South together, our consolidated valuation of Alphamin is C$1.5814/share and this valuation changes by approximately ±13.4% for every ±10% that the tin price moves from its current level of US$42,793/t. Alternatively, we calculate that Alphamin’s share price of C$1.15 discounts a long-term real tin price of US$34,055/t, which is 20.4% below the current (three-month) price of tin.

Exhibit 10: Tin price (US$/tonne) cf other metals, January 2020 to present

Source: Refinitiv (6 April 2022). Note: Uranium price data only available until September 2021.

As may be seen from the above graph, tin is the second best performing of 16 metals and minerals since 1 January 2020 (after prime Australian coking coal). Although it cannot be seen in the above graph, it is also the best performing of the same 16 metals and minerals since 1 January 2002.

Exploration success

Drilling at Bisie to date has achieved two important goals:

To narrow the gap between Mpama South and the currently operating Mpama North mine and deposit; in this respect, Mpama South drilling intercepts are now within 40m of the Mpama North orebody (cf 750m previously) at a similar mining level and the indications are that Mpama South and Mpama North were once one single zone of high-grade tin mineralisation that was subsequently displaced by a late-stage fault.

To demonstrate high-grade assay results at Mpama South.

Alphamin’s success in achieving these two goals creates the potential for synergies between the two deposits and expedited underground access to Mpama South, thereby connecting it to the already existing underground development, infrastructure and services of the Mpama North mine.

Mpama South drilling

Exploration at Mpama South throughout 2021 to the present has encompassed c 33,556m of drilling over 126 drillholes (average 266m per hole). Data from 100 holes have contributed to its updated resource. Data from 26 remain outstanding as at the time of writing with exploration ongoing. Selected significant intercepts encountered at Mpama South to date include:

22.7m at a grade of 3.12% Sn from 391.6m, including 7.7m at a grade of 4.73% Sn and 6.1m at a grade of 4.94% Sn in hole BGH095.

16.0m at a grade of 2.89% Sn from 297.7m in hole BGH088.

12.5m at a grade of 2.48% Sn from 371.9m in hole BGH094.

21.2m at a grade of 1.34% Sn from 387.4m, including 6.1m at a grade of 3.18% Sn from 402.7m in hole BGH101.

15.6m at a grade of 5.00% Sn from 290.2m down hole depth, including 10.0m at a grade of 6.1% from 291.1m in hole BGH079.

9.0m at a grade of 5.63% Sn from 316.9m in hole BGH079.

4.8m at a grade of 4.68% Sn from 335.3m and 11.4m at a grade of 2.23% Sn from 318.8m in hole BGH077.

26.0m at a grade of 2.71% Sn from 280.3m in hole BGH084.

6.1m at a grade of 2.75% Sn from 275.35m in hole BGH086.

14.4m at a grade of 3.2% Sn from 115.4m down hole depth in hole BGH075.

18.4m at a grade of 2.2% Sn from 278.9m (including 5.0m at a grade of 2.9% Sn and 2.8m at a grade of 7.2% Sn) in hole BGH074.

2.6m at a grade of 8.5% Sn from 276.0m in hole BGH066.

4.7m at a grade of 3.2% Sn from 295.8m in hole BGH067.

5.4m at a grade of 3.0% Sn from 331.0m in hole BGH070.

5.1m at a grade of 2.7% Sn from 274.6m and 4.4m at a grade of 3.6% Sn from 290.4m in hole BGH072.

These grades may be directly compared with Alphamin’s Mpama South’s updated resource grade of 2.47% Sn and Mpama North’s reserve grade of 4.01% Sn and its resource grade of 4.60% Sn (itself approximately the equivalent of a gold grade of 1oz/t in terms of the value of contained mineralisation at currently prevailing gold and tin prices). Moreover, visual cassiterite intercepts at Mpama South are now within 40m of the Mpama North mine. A phase 4 drilling campaign at Mpama South remains underway.

Mpama North drilling

Alphamin commenced extensional drilling of the Mpama North orebody in July 2021. By the end of October, approximately 6,167m of drilling had been completed over 12 drillholes (average 514m per hole) and had revealed the existence of a north-east to south-west cross-cutting fault causing a downward and westward offset of the deeper mineralisation. By refocusing drilling closer to the final drill line relative to previous exploration, holes drilled 75m further along strike succeeded in intersecting significant zones of cassiterite mineralisation. Based on its metal content factor (grade x width), for example, drillhole MND019 appears to be one of the two most significant intercept encountered on the property to date:

14.4m at a grade of 21.75% Sn from 432.2m, including 11.0m at a grade of 27.81% Sn

In this case, it is approximately matched by drillhole MND011, which earlier recorded:

19.6m at a grade for 17.16% Sn, including 14.5m at a grade of 23.0% Sn

Both visual and assayed thick high-grade tin intercepts at the Deeps target provide a significant opportunity for Alphamin. In particular, the process plant has a targeted feed grade of c 4.0% Sn. Hence, the very high-grade mineralisation intercepted in the Deeps area will need to be blended with substantial quantities of lower grade material – holding out the possibility of adding production from previously unmined lower grade blocks to the mining schedule and potentially adding low-grade areas to the resource with the effect, ultimately, of maintaining a steady feed grade at Mpama North and of extending the life of the mine. In addition, five new holes west of the identified fault have also intersected visual cassiterite providing strike extension potential on the western block in the shallower Oso target. Drilling at the Deeps and Oso will continue to refine Alphamin’s understanding of these mineralised areas with the objective of adding significantly to life-of-mine reserves and resources in due course. In addition, drilling will commence on the down dip eastern target of Mpama North in May 2022, which still remains open and untested.

Regional exploration

The Bisie Ridge is 13km long and hosts both the Mpama North and Mpama South deposits. The full length of the ridge was the subject of a follow up geochemical investigation in 2021 confirming tin and other base metal anomalies over the majority of its length. However, only a fraction (c 20%) of the ridge has been intensively drill tested to date. Six high priority drill areas have therefore been identified, with drilling at the first – Marouge – commencing in January 2022.

Financials

Between Q419 and Q421, Alphamin paid down financial net debt (ie excluding leases and unamortised fees) by US$161.0m, from US$88.6m at end-December 2019 to a net cash position of US$72.4m at end-December 2021 (equivalent to 5.6 US cents per share). As such, post year end, the company announced a C$0.03/share dividend (aggregate US$29.7m – Edison calculation), which was paid to shareholders on 11 February, as part of its newly devised strategy to balance capital allocations between ongoing exploration drilling, the fast-track development of the Mpama South deposit and shareholder distributions. Net cash was then reported to have improved by a further US$61m to US$129.5m in Q122 (post dividend).

Mpama South financing

It is not Edison’s practice to forecast net debt or net cash positions on a quarterly basis. However, we note that (excluding leases and unamortised fees) Alphamin increased its net cash position by US$67.9m in Q421 to US$72.4m and then by a further US$61m to US$129.5m in Q122, which is more than sufficient to fully fund Mpama South (which is in line with the company’s announcement to self-fund the development of the project) and pay an increased dividend for the year. Indeed, according to our calculations, an increased dividend of C$0.06/share for the year (Edison assumption) would only become compromised in the event that the tin price were to fall below US$10,000/t in the near future or if the long-term price of tin were to fall to below US$11,750/t – both of which are, to all intents and purposes, impossible.

Exhibit 11: Financial summary

Accounts: IFRS, Yr end: December, USD: Thousands

 

 

2018A

2019A

2020A

2021A

2022E

2023E

Income statement

 

 

 

 

 

 

 

 

Total revenues

 

 

0

27,221

187,445

352,883

519,609

541,747

Cost of sales

 

 

0

(7,915)

(119,554)

(138,217)

(148,659)

(151,281)

Gross profit

 

 

0

19,306

67,892

214,666

370,950

390,466

SG&A (expenses)

 

 

(9,440)

(14,526)

(17,238)

(19,754)

(20,775)

(20,775)

Exceptionals and adjustments

Exceptionals

 

0

(3,673)

(7,649)

0

0

0

Depreciation and amortisation

 

 

(20)

(7,927)

(25,471)

(26,632)

(33,085)

(41,560)

Reported EBIT

 

 

(9,460)

(3,147)

25,182

168,279

317,089

328,131

Finance income/(expense)

 

 

3

(6,330)

(15,614)

(8,358)

(2,000)

0

Other income/(expense)

 

 

7

(4)

(1,518)

(874)

0

0

Exceptionals and adjustments

Exceptionals

 

6,272

6,850

(8,776)

(26,922)

0

0

Reported PBT

 

 

(3,178)

(2,632)

(725)

132,126

315,089

328,131

Income tax expense (includes exceptionals)

 

 

0

7,755

(7,141)

(68,558)

(135,488)

(98,439)

Reported net income

 

 

(3,178)

5,123

(7,866)

63,568

179,601

229,691

Basic average number of shares, m

 

 

733

845

1,066

1,195

1,271

1,272

Basic EPS (US$/sh)

 

 

(0.00)

0.01

(0.01)

0.04

0.12

0.15

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

(9,440)

8,453

58,302

194,912

350,175

369,691

Adjusted EBIT

 

 

(9,460)

526

32,831

168,279

317,089

328,131

Adjusted PBT

 

 

(9,450)

(5,809)

15,699

159,048

315,089

328,131

Adjusted EPS (C$/sh)

 

 

(0.00)

0.01

(0.01)

0.05

0.15

0.19

Adjusted diluted EPS (US$/sh)

 

 

(0.00)

0.00

(0.01)

0.04

0.12

0.15

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

230,626

255,125

239,103

227,720

243,973

287,161

Other non-current assets

 

 

2,467

10,632

15,882

27,088

47,088

49,798

Total non-current assets

 

 

233,093

265,757

254,985

254,808

291,061

336,958

Cash and equivalents

 

 

17,105

5,941

6,559

90,640

228,892

269,369

Inventories

 

 

3,235

27,755

21,866

20,674

28,472

29,685

Trade and other receivables

 

 

0

1,486

7,601

47,626

51,961

54,175

Other current assets

 

 

3,738

17,633

6,710

7,402

7,402

7,402

Total current assets

 

 

24,078

52,815

42,736

166,342

316,726

360,630

Non-current loans and borrowings

 

 

80,896

78,229

34,821

0

0

0

Other non-current liabilities

 

 

6,699

9,641

8,872

31,258

119,746

79,522

Total non-current liabilities

 

 

87,595

87,870

43,693

31,258

119,746

79,522

Trade and other payables

 

 

7,030

23,487

17,037

55,381

59,056

41,447

Current loans and borrowings

 

 

0

16,339

25,810

17,035

0

0

Other current liabilities

 

 

5,711

16,290

13,250

6,742

6,742

6,742

Total current liabilities

 

 

12,742

56,116

56,098

79,158

65,798

48,189

Equity attributable to company

 

 

131,914

145,215

171,735

274,727

368,901

493,121

Non-controlling interest

 

 

24,921

29,371

26,196

36,007

53,342

76,756

 

 

 

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

 

 

 

Profit before tax

 

 

(3,178)

(2,632)

(725)

132,126

315,089

328,131

Net finance expenses

 

 

0

5,456

15,616

8,359

0

0

Depreciation and amortisation

 

 

20

7,927

26,504

26,634

33,085

41,560

Share based payments

 

 

300

403

471

681

0

0

Other adjustments

 

 

(6,272)

(6,851)

8,842

26,985

0

0

Movements in working capital

 

 

3,942

(6,710)

(20,281)

(43,636)

(8,458)

(21,036)

Interest paid / received

 

 

0

(3,092)

(11,378)

(6,758)

0

0

Income taxes paid

 

 

0

0

(843)

(2,196)

(47,000)

(138,663)

Cash from operations (CFO)

 

 

(5,188)

(5,498)

18,205

142,194

292,717

209,991

Capex

 

 

(116,094)

(22,720)

(7,448)

(22,516)

(69,338)

(87,457)

Acquisitions & disposals net

 

 

0

0

0

0

0

0

Other investing activities

 

 

151

(46)

(96)

(3,014)

0

0

Cash used in investing activities (CFIA)

 

 

(115,943)

(22,766)

(7,544)

(25,531)

(69,338)

(87,457)

Net proceeds from issue of shares

 

 

55,235

11,936

10,010

19,852

2,209

0

Movements in debt

 

 

69,448

0

(18,735)

(45,198)

(17,035)

0

Dividends paid

 

 

0

0

0

(5,552)

(70,301)

(82,057)

Other financing activities

 

 

6,317

5,165

(1,319)

(1,685)

0

0

Cash from financing activities (CFF)

 

 

131,000

17,100

(10,044)

(32,582)

(85,127)

(82,057)

Increase/(decrease) in cash and equivalents

 

 

9,869

(11,164)

617

84,081

138,252

40,477

Cash and equivalents at end of period

 

 

17,105

5,941

6,559

90,640

228,892

269,369

Net (debt) cash

 

 

(63,791)

(88,627)

(54,073)

73,605

228,892

269,369

Movement in net (debt) cash over period

 

 

(63,791)

(24,836)

34,554

127,678

155,287

40,477

Source: company sources, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Alphamin Resources and prepared and issued by Edison, in consideration of a fee payable by Alphamin Resources. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

Sydney +61 (0)2 8249 8342

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Alphamin Resources and prepared and issued by Edison, in consideration of a fee payable by Alphamin Resources. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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