Development of the Mpama South deposit at Alphamin Resources’ tin mine in the Democratic Republic of the Congo (DRC) is off to a good start and the company expects Mpama South to churn out the ounces late in 2023.
Work to develop the company’s second, big deposit is starting to gather momentum as the African mining fraternity watches on in anticipation. Mpama South has long been punted by geologists as another significant ore body in similar vein to Mpama North, the exceptionally high-grade deposits that Alphamin has been mining until now.
Mpama North is a world phenomenon and with an average grade of almost 4% a rare occurrence in the tin mining industry. What Alphamin has achieved, is a story not told often enough. But the story has not come to an end. In fact, with the discovery of the Mpama South’s ore body, Alphamin has added at least another 20 plus years to this riveting mining chapter.
Furthermore, by developing Mpama South, Alphamin will cement its position as one of the largest tin producers in the world. While global tin mines have struggled over the last year, Alphamin’s growth trajectory has continued. Mpama North, the only deposit in a cluster of scattered tin occurrences across the Bisie Hill that has, until now, actively been mined, already produces more than 4% of the world’s tin. Combining production from Mpama North and Mpama South will put Bisie almost in a league of its own.
Mpama South to narrow deficits
Alphamin predicts that when the ore from these two deposits are combined, the Bisie complex will produce more than 20,000 tons (t) of tin-in-concentrate annually from 2024. According to the International Tin Association (ITA), the rapid development of Mpama South will help to narrow the forecast deficits in the tin market over the next decade.
The opportunity to take advantage of the current shortfall in tin concentrate supply and the ability of Alphamin to self-fund the projects, played a critical role in the decision to develop Mpama South over the next 20 months. At full capacity, the mine is forecast to produce some 7,232t of tin-in-concentrate annually.
Since the development decision was made on 29 March earlier this year, a few milestones in the early works have been reached. At the same time exploration drilling to update the resources at Mpama South has continued unabated.
Alphamin awarded the EPCM contract for Mpama South’s development to South African consultants Obsideo. Obsidue successfully executed Alphamin’s fine tin plant in 2021. Meanwhile, long lead time plant capital orders have been placed as well as steel structure orders. The Mpama South access road has been completed and site clearing commenced earlier this month. According to a statement by Alphamin, bidding for bulk earthworks and civil contracts have been completed and is currently under evaluation.
Resource growth potential at Mpama South
Alphamin recently updated the Inferred Resource at Mpama South with more than 46% to 4.99Mt. Mpama South Mineral Resource now stands at: 0.84Mt @ 2.53% Sn for 21.4kt contained tin in the Indicated category; and 4.99Mt @ 2.50% Sn for 124.7kt contained tin in the Inferred category
Mpama South’s in-fill drilling is on track for completion by July 2022, while extension drilling recommenced in June. With
Mpama South’s early development works in progress Bisie exceeds even the most optimistic expectation in the DRC. Not only has the share price shot the lights out recently, but the hopes are high that Bisie will eventually be crowned as the top tin producer in the world. That milestone is not as far-fetched as the nay-sayers might believe.
According to data obtained from the International Tin Association’s Tin Industry Review Update 2021 Alphamin’s annual contained tin production from the current 12,000tpa to ~20,000tpa, approximating 6.6% of the world’s mined tin once development work at Mpama South has been completed.
Mpama South updated mineral resource estimate
The updated Mineral Resource for Mpama South follows two months after the previous update announced on 29 March 2022 and three months after the Maiden Mineral Resource announced 7th March 2022. The update is based on further receipt of assays for another 22 extensional drillholes completed subsequent to the previous estimate which was based on 102 drillholes.
Following the receipt of assays for the additional 22 drillholes, an updated Mineral Resource Estimate (MRE) for the Mpama South project was completed. The MRE now includes results from 124 drillholes as well as 6 drillholes in the Wedge area from the earlier drilling to 2015.
The Mineral Resource is classified into the Indicated and Inferred categories and is reported at a base case tin grade of 1.0%, which satisfies reasonable prospects for economic extraction. Mpama South Inferred Resources increased by 46% to 4.99Mt.
Alphamin continues to focus on exploration with expansionary and infill drilling expenditure of ~US$20million planned for FY2022. Furthermore, the company has done significant work at Mpama North to further extend the life of mine at its primary deposit that continues producing the goods. In addition, the company is looking at other scattered, known deposits that might add additional ounces to the existing ore bodies. There is no doubt that the Walikale District region, home to Alphamin’s mine, is shaping up to become another tin province in the world, as several of its geologists predicted when they started mapping the area.
Although global commodity prices have declined significantly during the month of May 2022 – the tin price is currently trading at ~US$34,000/t (Q1 2022: US$43,834/t) Alphamin continues its upward trend in green territory. The Company is a low-cost producer of tin with significant operating margins at current prices and has a strong balance sheet with large cash reserves for allocation towards its growth prospects, particularly the development of the Mpama South project.
Good results to back exploration success
Last month the company released good results for the Q1 period 2022. During this period the mine produced contained tin of about 3,061 tonnes which is in line with the previous quarter and FY2022 guidance.
Over the same time underground mining continued to deliver steady results and processing plant recoveries increased to 78% from 75% the previous quarter. Contained tin sales increased by 9% to 3,336 tonnes at an average tin price of US$43,834/t. The AISC2 per tonne of contained tin sold during Q1 2022 increased by 4% to US$15,782 from US$15,117 due to the impact of a higher tin price on off-mine costs (as some of these costs are variable and increase with increases in the tin price) and taking delivery of a large amount of replacement mining equipment. As a result of steady production, good cost control and higher revenue, EBITDA for Q1 2022 amounted to US$98.1m, up 32% from US$74.3m the previous quarter.
The lure of Alphamin
Exceptional exploration results at Alphamin recently confirmed theories that the region may soon be recognised as another tin province. Tin provinces are one of the best examples of metallogenic provinces. According to Lehmann (1990) about 85% of all historically mined tin is sourced from four main tin ore provinces within large granite belts. These are, in decreasing importance, Southeast Asia (Indonesia, Malaysia, Thailand, Myanmar), South China, the Central Andes (Bolivia, southern Peru) and Cornwall, in southwest England.
The Ridge at Alphamin’s Bisie operations that encompasses Mpama North and South is about 20km in length of which an extremely small area has been drilled up to now even after the extensive drilling programme that got underway late in 2020.
When Bisie was initially developed Alphamin only drilled out a deposit of five million tonnes. The mine was designed to be a “staged rollout”, where sufficient Resources were identified to support an initial operation with an adequate Life of Mine and acceptable returns. Once operating, further drilling would be carried out with internally generated cash flow.
The result was that Alphamin discontinued the exploration programme with only 40,000m drilled. The lure of Bisie was the grade though, which measured an average of close to 4.5%. In some holes, the geologists measured up to 7% Sn, which was unheard of. In the global context, that puts Alphamin in a class of its own.
At that stage, the highest-grade tin mine in the world was believed to be San Raphael in Peru, which mined tin at close to 2%. Since then, the average tin grade at San Raphael has dropped to well below 1.8%. The exciting fact about Bisie is that what they found initially and then developed is only the tip of an iceberg. The current mine sits on top of a single deposit (Mpama North) located on a mineralised ridge of between 13km to 20km long.
About 750m from Mpama North lies Mpama South and further along the ridge there are a number of prospective targets that can only be described as a “string of pearls”. These targets all fall within Alphamin’s tenement.
Mpama North fits the genetic model for tin deposits globally and like 99% of all tin in the world occurs in granite associated lithologies. What makes Bisie unique, however, is that the deposit has remained intact for millions of years, in contrast to similar deposits in the world where erosion played a much greater role a lot earlier. These deposits usually occur on intercontinental margins, whereas Bisie lies in an inter-cratonic zone and was subject to intense and repeated compression and extension.
The Bisie Ridge thus represents the contact between a granite/basement and metasediments. Mineralisation occurs where northeast trending structures cross-cut this contact, evident at both the Mpama North and Mpama South deposits. This configuration is also evident at several other localities along this 13km ridge contact. Alphamin is a strange anomaly in that it is a large, underexplored, extremely old, and has very high-grade deposit. This puts the company in a class of its own with the potential to become the largest and highest grade producing tin mine in the world.