ATM - Turner pope investments10 Feb 2021 10:12
AfriTin has completed Stage I of its Phase 1 production ramp-up at its pilot mining and
processing facility, achieving 63.9 tonnes of tin concentrate (containing 41.6 tonnes of
tin metal) during November 2020. Following the optimisation initiatives implemented
over the course of 2020, the performance of the operation has exceeded nameplate
production. 2021 will see AfriTin focus on maintaining steady state production, while
exploring opportunities for further optimisation and expansion of the operation (Stage
II). These opportunities include a modular expansion of the plant throughput and
potential production of a by -product in the form of a tantalum concentrate using
magnetic separation. The company will also continue to advance its studies into the
possibility of producing of a petalite concentrate from the mine (Stage III).
Production Levels, Revenue and Operating Profit
We forecast the Uis Mine to produce 1,071t of tin concentrate and 51t of tantalum
concentrate in 2021, rising to 1,244t of tin concentrate, 58t of tantalum concentrate and
37,467t of petalite concentrate in 2022.
Following the Phase 2 development, commencing in 2023 we forecast production levels
to increase substantially, reaching 5,108t of tin concentrate, 483t of tantalum
concentrate and 156,114t of petalite concentrate in 2025.
Based on these production forecasts and metal prices of US$23,000/t for tin,
US$150,000/t for tantalum and US$375/t for petalite concentrate, we forecast total
revenue of US$17.0m in 2021, increasing to US$33.7m in 2022. Post Phase 2 we forecast
revenue to increase to US$146.8m in 2025.
This results in the Uis Mine generating an operating profit of US$7.5m in 2021, rising
to US$22.9m in 2022 and reaching US$75.9m in 2024 once Phase 2 commences.
TPI updates its base-case valuation
We have updated our risked valuation for AfriTin to 12p per share, from 9.5p per share
previously, this is an upside of 201% on the current share price. Our unrisked valuation
is 15p per share an upside of 277% on the current share price.
(Please note that TPI’s valuation is based on financial modelling and there is no
guarantee that such a valuation will ever be realised, therefore please do not base
investment decisions on this valuation alone. Also please note that past performance is
not a reliable indicator of future results.)