AfriTin Mining (ATM ) has agreed a new offtake agreement for its tin concentrate with its existing trading partner, Thailand Smelting and Refining Corporation (“Thaisarco”) and signed an inaugural offtake agreement with AfriMet Resources AG for its future tantalum production.
The African-focused tin mining company told investors that its existing agreement with Thaisarco has been extended for a further three years, until 30 November 2023, with the agreement is in relation to the delivery of product at Walvis Bay Cargo Terminal in Namibia.
"Thaisarco remains a strong supporter of AfriTin and we are pleased to sign the new offtake agreement for responsibly sourced and conflict-free tin concentrate production for a further three years,” commented Andrew Davies, Managing Director of Thaisarco.
The Group’s tantalum concentrate offtake agreement is for tantalum produced at AfriTin’s flagship asset, the Uis Tin Mine ("Uis") in Namibia. The agreement covers a twelve-month period with an option to renew for a further three years upon mutual consent of the parties.This agreement with AfriMet includes a US$0.500m advance payment option.
AfriMet Resources is a strategic African commodity trading company owned by Vanomet AG which trades the 3T metals (tin, tantalum and tungsten) and minerals sourced from Africa.
Commenting on the agreement, Hadley Natus, CEO of AfriMet said, "AfriMet is delighted to announce its inaugural tantalum offtake agreement with AfriTin as the Company looks to explore additional avenues to monetise its tantalum concentrate production alongside its tin concentrate. AfriMet is pleased to have the agreement in place for an initial 12-month period with the option to renew for a further three years upon mutual consent."
"This last year has proved extremely positive for AfriTin, with tin production achieving design capabilities for Stage I at Uis ahead of year-end. This was a defining milestone for the Company, and I am delighted to report that the strong tin concentrate production levels have been maintained since November 2020,” said Anthony Viljoen, CEO of AfriTin Mining.
A first quarterly update on production performance will be made at the start of March 2021. A strong performance at Uis has coincided with the tin price hitting recent highs, breaking through the ceiling of US$23,000 per tonne for the first time since 2014, Viljoen noted.
He told investors that the main drivers behind the price increase were “the ever-growing demand from electronics and electric vehicles, alongside the low supply of tin inventories.”
He added that, “AfriTin is delighted by both votes of confidence, from two leaders in the global and African markets and looks forward to continuing these relationships."
In a separate statement, the Company announced that AfriMet has elected to convert its outstanding convertible loan notes plus accrued interest into fully paid AfriTin ordinary shares, as a result of which it will hold 5.1% of the Company’s enlarged share capital.
Equity broker, Turner Pope Investments, said this morning’s announcement both “reflect increasing confidence in the Company’s management and its operational progress.”
“Together, these agreements represent strong endorsement from two of the world’s leading metals refiners/distributors in the global and African markets, in turn providing AfriTin with improved visibility for its polymetallic output,” it wrote.
With the belief that AfriTin will continue to surpass market expectations, at a time when it is also benefiting from strengthening metal prices, the broker released an updated base case valuation on Wednesday, targeting a risk-adjusted 12p per share (representing upside of 193% on the current share price) or 15p per share (upside of 266%) when unrisked.
Shares in AfriTin Mining have increased by nearly 70% in value from 2.5p since the start of the year. The stock was trading 6.25% higher at 4.25p following the announcement.
Reasons to Follow
AfriTin Mining is the first pure tin mining company listed in London. Its vision is to create a portfolio of globally significant, conflict-free, tin-producing assets. The Company's flagship asset is the Uis Tin Mine in Namibia, formerly the world's largest hard-rock opencast tin mine.
The Company’s objective is to capitalise on the solid supply/demand fundamentals of tin by developing a critical mass of tin resource inventory, achieving production in the near term and further scaling production by consolidating tin assets in Africa.
In December 2020, AfriTin successfully completed Stage I of its Phase 1 production ramp-up of its pilot mining and processing facility, achieving 63.9 tonnes of tin concentrate (containing 41.6 tonnes of tin metal) during November 2020, a 32% improvement on October 2020.
The production level achieved in November represented c.107% of the Stage I target in terms of tin concentrate tonnes produced and 116% of the Stage I target in terms of tin contained in concentrate. Overall, the performance of the operation exceeded nameplate production with the Company reaching this milestone prior to the end of 2020 as previously projected.
Viljoen said this provides AfriTin with the platform to progress, “with proven confidence, its development plan for the Uis Tin Mine towards a large-scale mining and processing facility."
In a recent investor webinar, Viljoen, discussed AfriTin’s objectives and the wider market.
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