First Mining Drc-Zambia March -April 2020 digital edition First Mining Drc-Zambia March - April 2020 digital | Page 5

NEWS
NEWS
Alphamin exercises option to reduce 2020
capital repayments as COVID-19 hits tin price
A
LPHAMIN Resources Corporation
(Alphamin) has exercised an
option with lenders to defer capital
repayments on its debt – a development
that comes amid lower-than-planned
tin pricing, partly brought about by the
COVID-19 outbreak. Commenting in
a statement today, the Toronto- and
Johannesburg-listed company said it
would defer some $16.3m in capital
repayments in its 2020 financial year.
Alphamin is building Bisie, a tin mine
in the Democratic Republic of Congo’s
(DRC’s) North Kivu province. The initial
mining plan was for production of 9,600
tons of tin-in-concentrate annually over
an initial life-of-mine of 12.5 years.
Under the previous debt repayment
schedule, it was to have paid $8.17m per
quarter starting from this month, but it
will now pay $1.3m in interest on its debt
to end-June and from July, a monthly
fixed debt capital instalment of about
$2.72m over 36 months plus interest of
$1.3m initially a month.
The option to amend the repayment
schedule was provided by lenders in
October and will allow the company to
“strengthen its working capital” ahead of
debt repayments, the company said.
A cash fee of $400,000 was paid on
exercise of the option. The repayment
amendments come as the London Metal
Exchange (LME) quoted tin price trades
at $15,000 to $17,000 per ton. This is
below the $17,000/t assumed in the
firm’s technical report for Bisie ahead of
its construction.
“The company continues to focus on
achieving its full production targets at
the lowest possible unit cost,” the firm
said, acknowledging that the “… recent
coronavirus outbreak is having an impact
on global commodity prices”.
The tin price was trading at about $20,000/t
in mid-2019. The metal’s price decline was
last year blamed on “… challenges faced
by the global electronics industry on the
back of the US/China and Japan/South
Korea trade wars.”
Alphamin has had its fair share of mishap
since construction of Bisie began. A
bridge used to export all concentrates
and import consumables from the DRC
collapsed in October last year, delaying
shipments. Before that, the company
changed its mining method which
resulted in a slower ramp up of material
to the run of mine stockpile.
Commercial production from the mine
was also delayed last year following a
slower-than-expected response to a
request to partially export concentrates
by air freight.
As a result, the company was required
to truck all export material which had
“… impacted delivery times and related
revenue receipts”.
A delay in VAT refunds from the DRC
government and a further delay in the
manufacture and delivery of certain
components to finalise plant commissioning
had also contributed towards a working
capital shortfall last year.
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