Tin price solid and interim dividend beckons

Alphamin’s board is scheduled to consider its FY26 interim dividend in Q426. However, if the tin price remains high, we believe that a repeat of the C$0.13/share FY25 final dividend is feasible. The tin price has risen by over 50% in the past 12 months, to over US$50,000/t today, driven by high demand for electronics and electric vehicles and constrained supply (especially at the Man Maw mine in Myanmar). While difficult to forecast with any certainty, there appears to be a growing consensus that this may prove to be more than a transient state of affairs.

Valuation: History implies C$4.44/share possible

Our discounted dividend valuation of Alphamin is US$1.03/share, or C$1.46/share (cf C$1.41/share previously), which is within a cent of our DCF valuation of C$1.47/share. They are both slightly in excess of our cash flow and terminal multiple valuation of C$1.43/share; however, this reflects the inclusion of exploration capex in the latter. If this exploration investment is able to extend Alphamin’s life of mine by five years, it adds C$0.20/share to our valuation, to C$1.63/share. If it is able to extend it by 10 years, it adds C$0.33/share. If it is able to extend its life indefinitely, it adds C$0.53/share (on an ex-growth basis beyond FY29). However, these valuations are conducted at a long-term tin price of US$31,651/t. At the current tin price ( US$53,583/t), our valuation rises to C$2.48/share (see Exhibit 13). In relative terms, Alphamin is priced at multiples that are cheaper than its peers on 33 out of 41 (or 80%) of valuation measures. However, at the current price of tin, it is cheaper on 100% of valuation measures. Reverse engineered, even at Edison’s long-term tin price, we calculate that the Alphamin share price implied by the average multiples of its peers over the next three years is C$3.45. Finally, it is also cheap relative to history. Since achieving profitability in FY21 it has traded on an average contemporary current year P/E multiple of 11.2x and a yield of 6.7%. Trading on those same multiples over the next three years would, according to our estimates, require share prices as high as C$3.87 in FY26 and C$4.44 in FY28.

Q226 results and FY26 forecasts

Alphamin’s Q226 financial results were released on 31 July, within the context of operational results that had already been pre-released on 13 July, and they were nothing if not striking, with revenue, operating profit, EBITDA, PBT and net profit all posting records for the second quarter in succession, and attributable profit and EPS falling fractionally short of posting new records on account of a slightly higher than normal minority interest in percentage terms (owing to losses at the parent entity level in which the ABM minorities did not share – major items in Q2 relating to dividend withholding taxes and foreign exchange losses). All-in sustaining costs (AISC) remained at higher levels, but no more so than expected, given the high tin price, which flows through into selling costs and royalties. Nevertheless, while the AISC was US$1,074/t higher than in the previous quarter, the tin price was US$2,679/t higher, resulting in a 0.4pp widening of the gross margin to 68.7% (the third highest on record after Q122 and, slightly anomalously, Q419 when the mine was undergoing its initial ramp up into production).

Although Alphamin’s net cash position declined by US$50.0m to US$92.8m (excluding lease liabilities) in the quarter, this only reflected the distribution of US$161.7m in dividends and associated withholding taxes. Excluding these items, we estimate that Alphamin’s net cash position would otherwise have increased to US$254.5m at end-Q2, reflecting underlying cash accumulation of US$111.7m in the three-month period.

The board is scheduled to consider the interim FY26 dividend in Q4. This followed its decision at end-Q1 to make a final FY25 cash distribution of C$0.13/share (c US$121m in aggregate) relating to FY25. Given this surplus (and since capex for the Mpama South mine was only budgeted at US$127.6m), we would be surprised if the board were not to recommend a similarly generous dividend in Q4 as the interim FY26 distribution, as long as the tin price remains at its current, relatively elevated level.

Financially, revenue exceeded our prior forecast by US$16.5m (6.9%), while costs (including G&A and depreciation) were only US$1.8m (1.8%) higher, leading to a US$14.6m (10.9%) positive variance at the operating level. Another feature of the results was a US$2.6m foreign exchange loss (treated by Edison as an exceptional item). This followed a similar US$11.7m foreign exchange loss in Q1 owing to the translation to spot rate on 31 March for advances for corporate tax liabilities following the enactment of a decree by the DRC Ministry of Finance requiring corporate income tax liabilities to be fixed and settled in US dollars. This was the third-highest foreign exchange loss in at least 30 quarters (7½ years) and, in its absence, attributable profit and EPS would also have posted records for the quarter as well as revenue, operating profit, EBITDA, PBT and net profit. After the foreign exchange loss (which we typically decline to attempt to forecast), profits before tax were US$11.7m (or 8.7%) higher than our prior forecast, partially offset by total tax, which was 7.8%, or US$5.7m, higher (although the effective tax rate was almost exactly in line at 46.0% cf 45.5% forecast), such that net profits were US$5.7m (or 7.8%) higher. Attributable earnings and headline earnings were 3.2% higher than our prior forecasts after a 3.6 percentage point increase in the minority interest.

Exhibit 3, below, provides a comparison of Q226 results relative to our prior forecasts as well as our updated forecasts for the remainder of FY26, by quarter, in the light of Alphamin’s Q226 financial results:

As noted in our last report on Alphamin (see Tin closing in on US$55,000/t, published on 8 May), a super profit tax may apply to the company’s FY26 taxable profit (payable in April 2027) if the average tin price achieved during 2026 exceeds 125% of the tin price assumed in the most recently approved feasibility study. The most recently approved feasibility study included a forecast tin price for 2026 of US$30,333/t and, on this basis, the super profit tax would become applicable if the average tin price achieved during 2026 exceeds US$37,916/t. Given that the tin price has averaged US$50,693/t in the year to date, it would have to average less than US$20,605/t for the remainder of the year for this to be the case (ie it seems likely that the tin price threshold for paying super profits tax will be met). The super profit tax is determined with reference to Alphamin Bisie Mining’s Excédent Brut d’Exploitation (EBE), an OHADA (ie Central and West African) accounting measure broadly comparable to EBITDA. Under the legislation, where EBE exceeds 125% of the level contemplated in the feasibility study, an additional 20% tax may apply to the incremental portion, increasing the effective tax rate on that portion from 30% to 50%. Based on the most recently approved feasibility study, which according to management forecasts a 2026 EBE of c US$377m from 20,225 tonnes of production, this would illustratively imply a potential threshold of c US$471m in EBE before the additional tax would apply. No super profit tax was liable for FY25. However, with the H126 achieved average tin price having been above the applicable threshold, Alphamin has prudently started accruing for possible super profit tax. To this end, it recognised a US$7.5m super profit tax accrual in its accounts in Q1 plus a further US$9.5m in Q2 to take the total for the year to date to US$17.0m. Nevertheless, the application of the super profit tax provisions remains subject to interpretation by the relevant authorities, and the thresholds and resulting tax exposure may therefore differ from the illustrative figures presented above and from the company’s current understanding of the legislation.

Dividends

Alphamin’s board declared a final cash dividend of C$0.13/share for FY25 at the time of its Q126 results. This followed two interim dividends of C$0.07/share and C$0.04/share already paid in FY25. The table below shows Alphamin’s entire dividend history for the periods for which dividends were declared. This compares with our financial summary (Exhibit 14 below) and our front-page table, which show dividends for the periods in which they were paid.

In the 4½ years since it started making distributions therefore, Alphamin has returned C$0.45/share to shareholders in the form of dividends, which compares favourably to its current share price of C$1.44.

By historical standards, the C$0.13/share FY25 final dividend is clearly generous. However, we believe that it is sustainable at these higher tin prices, and, having set the precedent, we believe that the board will wish to maintain at least this level of dividend for the interim FY26 payout, all other things being equal. However, we think that the distribution might come under pressure if the tin price falls to Edison’s long-term price of US$31,651/t. This would be especially true if the prior year is one in which super profits were accrued, which would also give rise to a large corporate tax outflow in April of the year in question.

We do not know the board’s intentions regarding future dividends. However, we assume that it will be prudent in its payouts to shareholders. For the purposes of our valuation (below), we have initially assumed that the tin price remains high in FY26, but then falls back to long-term levels in FY27, in which the company’s super profit liability accrued in FY26 will also become payable. This would restrain the dividend potentially payable in FY27, although the board may wish to keep the actual dividend high, depending on its assessment of circumstances at the time. From FY28 we assume that all dividends that can be paid will be paid, to leave the company with zero net cash at the end of its assumed life in FY38. Variations from this ‘base case’ assumption are provided in the ‘Sensitivities’ section below.

Exploration

Exploration continued in Q2, with a total of 3,654m drilled at Mpama South and 1,893m at Mpama North (in aggregate, an 18.7% increase relative to Q1).

Highlights of the three holes completed at Mpama North were:

• Hole MND057D2_T7 (deflected from the MND057 mother hole) intersected 1m of intense chlorite alteration with thin visible cassiterite mineralisation from 696m to 697m down-hole depth (c 610m vertical depth below surface). Although thin, this is the deepest cassiterite intersection recorded at Mpama North to date and confirms that the tin mineralising system extends to at least this depth below surface.
• Hole MND056BD4_T5 (deflected from the MND056B mother hole) intersected 11m of amphibolite host rock from 609m to 620m, including 1m of intense chlorite alteration from 619m to 620m. No visible cassiterite mineralisation was intersected, and the intersection is therefore interpreted to be at or beyond the lateral margin of the mineralised corridor. Nevertheless, this result informed the design of an up-dip deflection to re-test the mineralised envelope at a shallower position within the same structural corridor.
• Hole MND057D1_T6 (deflected from the MND057 mother hole) intersected 3.5m of amphibolite host rock from 702m to 705.50m with moderate chlorite alteration. No visible cassiterite mineralisation was observed, consistent with the lateral margin of the mineralised system at this depth.

Drilling at Mpama South in Q2 targeted extensions of the defined resource at depth. Five holes were completed, of which three intersected visible cassiterite mineralisation. Highlights included:

• Hole BGH206D2_T5 intersected visible cassiterite mineralisation over 19.29m, with intense chlorite and sulphide alteration from 426.41m to 445.70m. This is the most significant new intersection at Mpama South in the current programme. Two deflections from the BGH206 mother hole are planned at 275m and 230m depth to test the continuity of mineralisation with the defined resource above. External laboratory assay results are pending.
• Hole BGH204D1 intersected visible cassiterite mineralisation over 17.48m, with intense chlorite and sulphide alteration from 524.00m to 541.48m. External laboratory assay results are pending.
• Hole BGH203D1 intersected visible cassiterite mineralisation over 1.35m, from 577.85m to 579.20m. External laboratory assay results are pending.

A cross-section of the areas being targeted by Alphamin is shown below:

One of Alphamin’s company objectives is to increase the intensity of its exploration to add to the current life of operations via drilling campaigns and focusing on grass-roots exploration in search of tin deposits in close proximity to the Bisie mine. In pursuit of this aim specifically, it has five initiatives currently underway:

• A VTEM (Versatile Time Domain Electromagnetic) airborne survey covering the full Alphamin licence area was completed in mid-June 2026 and is intended to provide advanced targets using the spatial association of sulphide mineralisation with cassiterite (tin oxide). Interpretation of the results currently is underway and expected to be delivered in Q326.
• Geochemical (soil) surveys commenced in Q2, covering the Mpama Ridge north of the Oso River and all areas adjacent to basement rock units (similar geological settings to Mpama Ridge) with 13,000 samples planned for phase one of the survey, which is expected to take six months to complete.
• A downhole electromagnetic (EM) geophysical survey tool was mobilised to the site in Q226 and has since commenced operation. This will assist in mapping the apparent spatial association between massive sulphides and tin mineralisation in order to identify further resource extension drilling targets.
• Further drilling is planned to test the gap between Mpama North and Mpama South, Mpama North depth extensions beyond the current faults and north of Mpama North (as depicted by the white circles in Exhibit 5).
• The company plans to release an updated resources and reserves estimate in Q426.

Valuation

Edison’s absolute valuation of single-asset mining companies is typically based on the value of dividends that a shareholder could expect to earn from their investment if they were to hold their shares from the moment of purchase until the end of the life of the mine, discounted to present value. Discretionary exploration investment is ordinarily excluded from the financial forecasts when this method is used, as it is presumed to be at least value adding. In practice therefore, the dividends in question are ‘maximum potential dividends’ (subject to assumptions about metals prices). However, the resulting net present value should be considered a conservative valuation since it omits the optionality of blue-sky exploration success during the operation of the mine. This method was typically used by the analyst community to value South African mines that were listed in London, such as Driefontein, Kloof, Vaal Reefs, Beatrix and Western Deep Levels, etc (albeit with different accounting practices), prior to 1995 when the South African mining house system of mine financing began to change.

Compared with the alternative discounted cash flow (DCF) method of analysis, the discounted dividend approach more purely reflects the returns that an equity shareholder may expect to receive. Hence, it is possible to calculate an internal rate of return (IRR) pertaining to an investment in a company’s equity at any particular share price and any particular point in time, rather than calculating an IRR for a project as a whole (which typically aggregates debt and equity returns and is therefore independent of a company’s share price). In its application it can also be made to naturally accommodate future equity dilution in calculating returns to shareholders. Being based on only one unit of measurement (forecast future dividends), it is also relatively simple to estimate a value (and hence share price) at some point in the future in contrast with a DCF valuation, which typically requires three inputs (namely, forecast future cash flows, net debt/cash and minority ownership). However, in the case of Alphamin, we have decided to present both discounted dividend and DCF valuations in order to benefit from the latter’s ability to generate a terminal cash flow multiple to accommodate potential mine life extensions.

Given our assumptions (above), we assume that FY26 will be an exceptional year in terms of earnings and dividends, but there will be a return to normality in FY27. As noted previously, under these circumstances, we expect the dividend to be restrained in FY27, but then to rebound in FY28 when there is no longer any super profit liability to be paid. For the eight years thereafter, we expect EPS to average US$0.12/share and the maximum potential dividend to average C$0.18/share ( US$0.13/share). On the basis of discounted dividends therefore, our valuation of Alphamin, as at 1 January 2026, is US$1.03, or C$1.46/share (cf C$1.41/share previously).

In this case, our discounted dividend valuation is almost exactly corroborated by a discounted attributable cash flow valuation also of C$1.47/share, under the same circumstances, which is as expected for a company with no net debt and assumed to pay out all excess cash and cash flow in the form of dividends (a key assumption of our discounted dividend valuation).

Our cash flow and terminal multiple valuation methodology uses FY29 as its terminal year, as it is representative of the cash flows per share that we estimate Alphamin is capable of earning for the following seven years. Since it includes discretionary exploration expenditure (which our discounted dividend and discounted cash flow valuations do not), this approach yields a slightly lower valuation number of C$1.43/share. Even so, the discrepancy with our discounted dividend and DCF valuations is negligible at less than 3%. Edison’s ‘base case’ assumptions already assume that sufficient resources will be upgraded into reserves at Mpama North to extend its life until FY36. However, if ongoing exploration is capable of extending the life of mining operations at Bisie indefinitely, our valuation of Alphamin rises to C$1.95/share currently (cf C$1.91/share previously).

A graph of our valuation of Alphamin as at 1 January 2026, given increasing operational life at Bisie with exploration success, is shown below:

In the meantime, at Alphamin’s current share price, our forecasts suggest a current year P/E ratio falling from 18.3x in FY23 (see also Exhibits 9 and 10) to 4.8x in FY26.

Relative valuation

A comparison of Alphamin’s valuation relative to those of its peers, based on a series of commonly used prospective valuation multiples (where available), is provided below:

On this relative basis, Alphamin is priced at multiples that are cheaper than the averages of its peers on 91% of valuation measures (ie 11 out of 12). On a discrete basis, it is cheaper than its peers on 33 out of 41 (or 80%) of valuation measures. Alternatively, we calculate that the average Alphamin share price implied by the average multiples of its peers is C$5.54 in FY26, followed by C$1.61 in FY27 and C$3.22 in FY28, notwithstanding the fact that our forecasts for FY27 and FY28 are based on our long-term tin price of US$31,651/t, which is a 40.9% discount to the current price of US$53,583/t. Suffice it to say, at the current price of tin, Alphamin is cheaper than its peers on 100% of the valuation measures shown above.

Historical valuation

AFM has recorded positive EPS since FY21 and has paid out dividends since FY22. Since 2021, its average current year P/E ratio has been 11.2x, while its average (current year) dividend yield has been 6.7% (based on dividends paid in the period, rather than dividends paid for the period):

A summary of the share prices implied by AFM’s average historical P/E ratio of 11.2x current year earnings over the past five years, from FY21 to FY25 (inclusive), and its average historical yield of 6.7% from FY22 to FY25 (inclusive), as applied to Edison forecasts for FY26e to FY28e, is as follows:

Sensitivities

By far Alphamin’s greatest valuation sensitivity is to the price of tin, which has risen by over 50% in the past three quarters, from US$33,986/t in Q325 (ie close to Edison’s long-term price assumption) to over US$50,000/t today, driven by high demand for electronics and electric vehicles pushing the market into a structural deficit as constrained supply (especially at the Man Maw mine in Myanmar) fails to match demand growth. While speculative activity may also have contributed to the price rises, there appears to be a growing realisation among both market participants and investors that this may not be a transient condition and that the market could be moving into a long-term phase characterised by constrained supply coupled with high demand. We are reviewing our long-term tin price assumptions in the light of these circumstances. However, in the meanwhile, the table below shows our discounted dividend valuation at a variety of long-term tin price options:

Note that the relatively small valuation increase between a tin price of US$35,000/t and one of US$40,000/t arises from the assumption of a permanently higher cost base at prices beyond this threshold. Otherwise, it can be seen that our valuation of AFM rises by c C$0.25/share for every US$5,000/t by which we raise our long-term tin price.

Financials

Alphamin had net cash on its balance sheet of US$92.8m as at end-Q2 (excluding lease liabilities). This was lower than the US$142.8m that it recorded at end of Q1, but (at least in part) reflected the payment of a US$147.5m dividend during the period (including dividends to third parties) and an associated US$14.2m in withholding taxes. Excluding these two items, we may posit that Alphamin’s net cash position would otherwise have been US$254.5m as at end-Q2, reflecting underlying cash accumulation of US$111.7m during the quarter. With the decision on the FY26 interim dividend scheduled for Q4, we expect Alphamin to revert to cash accumulation rates at approximately this level in the meantime, making a generous dividend in that quarter a distinct possibility as long as the tin price remains at approximately current levels (we have assumed an interim payout of C$0.13/share – the same as the FY25 final dividend). Otherwise, given that it has no major capital projects planned and is highly cash generative, there should be no reason for it to return to a condition of net debt unless by the specific design of the board and/or unforeseen circumstances.