Atm25 Jun 2020 11:34
capacity
With production ramping up to nameplate capacity for phase one, a phase two expansion programme is now being contemplated
25 June 2020
“We’re back on track now,” says Anthony Viljoen, chief executive of AfriTin Mining Ltd (LON:ATM).
Production at the company’s Uis Tin Mine in Namibia had experienced some disruption as a result of coronavirus-related supply chain disruptions and lockdown restrictions, but a recent easing of those restrictions has allowed the operation to return to “full scale” production.
The ramp-up, which was ongoing when the coronavirus crisis hit, is now back on, and Viljoen is quietly confident that the rate of tin production from Uis can hit the 60-to-65 tonne per month target either towards the end of the third quarter of this year or into the fourth quarter.
Much depends on how much of an effect the virus is still having by then, but much too on the efficiency and ability to operate in difficult circumstances that AfriTin has already demonstrated.
“Namibia is a relatively easy place to curtail the spread of a pandemic,” says Viljoen.
“There are only two million people in the entire country, and there have only been 34 cases of coronavirus. Our mine is 200 kilometres from a major town.” That’s helpful when it comes to keeping a mine going in the context of a global pandemic, but what’s also helpful is Uis’s long track record of historical production. Namibians know this operation, they know what it does, how it works, and what the benefits of having it up and running are.
“They are very cognisant of the importance of mining,” says Viljoen.
In short, the Uis mine is back in business and if any mine anywhere has a good chance of staying in business then this is it.
So, what will that mean for shareholders?
For one thing the share price is now well off its March lows, although a sparse following in the retail space does mean that there’s not quite as much volume as Viljoen might like.
More importantly, it means cash is coming in and will continue to come in.
AfriTin despatched its fourth shipment of tin concentrate earlier this month, and with the ramp-up now underway again, product will be going out with increasing frequency.
That in turn will allow for the second phase of the mine’s development, the aim of which is to bring to bear the value of the huge resource base that still exists at Uis.
Phase one has two distinct aims: to iron out pressure points in the production process, and more importantly to demonstrate commercial viability.
“We’re making huge strides in terms of the optimisation of the plant,” says Viljoen.
“We’re expecting a 20% margin, and that’s just on the tin, with the tin price at around US$15,000. Add in the tantalum and the margin goes up quite substantially. Our C1 costs are running at around US$13,800 per tonne, but the bigger we make the throughput the more lucr
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